The IRS has announced new tax rates, credits and exclusions that will take effect in 2025. The changes may be good news for some taxpayers. The IRS adjusts tax brackets and rates based on inflation.
IRS TAX RATES
Reproduced below are the 2025 gift and estate tax figures published by the IRS. These are followed by information on the new income tax brackets and rates applicable to income earned in 2025. Note: this information applies to the 2025 tax year, not to 2024 tax filings.
Combined Gift and Estate Tax Exemption
The estate tax credit and annual gift tax exclusion amount are going up.
.41 Unified Credit Against Estate Tax. For an estate of any decedent dying in calendar year 2025, the basic exclusion amount is $13,990,000 for determining the amount of the unified credit against estate tax under § 2010.
Gift Tax Annual Exclusion
.43 Annual Exclusion for Gifts. (1) For calendar year 2025, the first $19,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts under § 2503 made during that year.
Income Tax Rates
2025 income tax rates for taxpayers who are married filing jointly are reproduced below.
.01 Tax Rate Tables. For taxable years beginning in 2025, the tax rate tables under § 1 are as follows:
TABLE 1 – Section 1(j)(2)(A) – Married Individuals Filing Joint Returns and Surviving Spouses
| If Taxable Income Is: | The Tax Is: |
| Not over $23,850 | 10% of the taxable income |
| Over $23,850 but not over $96,950 | $2,385 plus 12% of the excess over $23,850 |
| Over $96,950 but not over $206,700 | $11,157 plus 22% of the excess over $96,950 |
| Over $206,700 but not over $394,600 | $35,302 plus 24% of the excess over $206,700 |
| Over $394,600 but not over $501,050 | $80,398 plus 32% of the excess over $394,600 |
| Over $501,050 but not over $751,600 | $114,462 plus 35% of the excess over $501,050 |
| Over $751,600 | $202,154.50 plus 37% of the excess over $751,600 |
TABLE 3 – Section 1(j)(2)(C) – Unmarried Individuals (other than Surviving Spouses and Heads of Households)
| If Taxable Income Is: | The Tax Is: |
| Not over $11,925 | 10% of the taxable income |
| Over $11,925 but not over $48,475 | $1,192.50 plus 12% of the excess over $11,925 |
| Over $48,475 but not over $103,350 | $5,578.50 plus 22% of the excess over $48,475 |
| Over $103,350 but not over $197,300 | $17,651 plus 24% of the excess over $103,350 |
| Over $197,300 but not over $250,525 | $40,199 plus 32% of the excess over $197,300 |
| Over $250,525 but of not over $626,350 | $57,231 plus 35% the excess over $250,525 |
| Over $626,350 | $188,769.75 plus 37% of the excess over $626,350 |
Standard Deduction for 2025
For Single Filers = $15,000 (can increase by $2,000 if over age 65)
For Couples Filing Jointly = $30,000 (can increase by $1,600 each if over age 65)
The above rates and other 2025 tax numbers are available here.
