2025 Federal Tax Brackets & Standard Deduction: The Complete Guide
Every year, the IRS adjusts tax brackets and the standard deduction for inflation. For the 2025 tax year (taxes filed in early 2026), these adjustments mean you can earn more money before moving into a higher tax bracket. Understanding these changes is crucial for tax planning and estimating your take-home pay.
2025 Federal Tax Brackets
The US uses a progressive tax system. This means you don't pay one flat rate on all your income. Instead, portions of your income are taxed at different rates. Here are the 2025 brackets:
Single Filers
- •**10%**: $0 to $11,925
- •**12%**: $11,926 to $48,475
- •**22%**: $48,476 to $103,350
- •**24%**: $103,351 to $197,300
- •**32%**: $197,301 to $250,525
- •**35%**: $250,526 to $626,350
- •**37%**: Over $626,350
Married Filing Jointly
- •**10%**: $0 to $23,850
- •**12%**: $23,851 to $96,950
- •**22%**: $96,951 to $206,700
- •**24%**: $206,701 to $394,600
- •**32%**: $394,601 to $501,050
- •**35%**: $501,051 to $751,600
- •**37%**: Over $751,600
2025 Standard Deduction
The standard deduction reduces your taxable income. You can choose to take the standard deduction (which is easy and what 90% of people do) or itemize deductions (which requires receipts for things like mortgage interest, charitable donations, and state taxes). You should pick whichever number is higher.
- •**Single**: $15,750 (up from $14,600 in 2024)
- •**Married Filing Jointly**: $31,500 (up from $29,200)
- •**Head of Household**: $23,625 (up from $21,900)
Marginal vs. Effective Tax Rate
It's a common myth that moving into a higher tax bracket means *all* your money is taxed at that higher rate. That's false. Only the income *above* the bracket threshold is taxed at the higher rate.
**Marginal Tax Rate**: The rate you pay on your *last* dollar earned. This is your 'tax bracket'.
**Effective Tax Rate**: The actual percentage of your total income that typically goes to the IRS. This is always lower than your marginal rate because of the standard deduction and lower lower brackets.
Don't Forget FICA Taxes
In addition to federal income tax, you pay FICA taxes (Federal Insurance Contributions Act) which fund Social Security and Medicare. These are generally flat rates:
- •**Social Security**: 6.2% on earnings up to $176,100 (for 2025).
- •**Medicare**: 1.45% on all earnings (no limit).
- •**Additional Medicare Tax**: An extra 0.9% for single filers earning over $200,000 (or married couples over $250,000).
How to Lower Your Tax Bill
The best way to lower your taxes is to reduce your *taxable income* through pre-tax contributions.
- •**401(k) / 403(b)**: Contribute up to $23,500 in 2025. This money comes out of your paycheck *before* taxes are calculated.
- •**HSA (Health Savings Account)**: If you have a high-deductible health plan, contribute to an HSA. It's triple-tax-advantaged.
- •**Traditional IRA**: You may be able to deduct contributions to a Traditional IRA, depending on your income and if you have a retirement plan at work.