IRS announces new federal income tax brackets and higher deductions for 2025

The IRS has announced new federal income tax brackets and higher standard deductions for 2025. The top tax rate of 37% will apply to individuals earning over $626,350 and married couples earning over $751,600. Other tax provisions, including long-term capital gains brackets and estate tax exemptions, have also been adjusted. The new brackets range from 10% for incomes up to $11,925 to 37% for incomes above $626,350. If Congress does not act, tax rates from 2017 will return after 2025, changing the brackets to 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.