2025 Federal Tax Bracket Changes

The IRS adjusts federal tax brackets annually for inflation. Here's what you need to know about the 2025 federal tax brackets and how they impact your paycheck.

2025 Federal Tax Brackets

The federal income tax system uses seven tax brackets, ranging from 10% to 37%. Here are the 2025 brackets:

Single Filers

10%: $0 to $11,600

12%: $11,600 to $47,150

22%: $47,150 to $100,525

24%: $100,525 to $191,950

32%: $191,950 to $243,725

35%: $243,725 to $609,350

37%: Over $609,350

Married Filing Jointly

10%: $0 to $23,200

12%: $23,200 to $94,300

22%: $94,300 to $201,050

24%: $201,050 to $383,900

32%: $383,900 to $487,450

35%: $487,450 to $731,200

37%: Over $731,200

What Changed from 2024?

The 2025 brackets increased by approximately 2.8% due to inflation adjustments. This means:

Higher income thresholds for each bracket

Potentially lower effective tax rates for the same income

More of your income taxed at lower rates

How Tax Brackets Work

Many people misunderstand tax brackets. You don't pay your top bracket rate on all your income - only on the portion that falls within that bracket.

Example

If you're single and earn $60,000:

First $11,600 taxed at 10% = $1,160

Next $35,550 taxed at 12% = $4,266

Remaining $12,850 taxed at 22% = $2,827

**Total Tax**: $8,253 (13.8% effective rate)

Standard Deduction Changes

The standard deduction also increased for 2025:

**Single**: $14,600 (up from $14,600 in 2024)

**Married Filing Jointly**: $29,200 (up from $29,200 in 2024)

Social Security and Medicare

Social Security

Tax rate: 6.2% (employee portion)

Wage base limit: $168,600 (increased from $160,200)

Maximum tax: $10,453.20

Medicare

Tax rate: 1.45% on all wages

Additional 0.9% on wages over $200,000 (single) or $250,000 (married)

Impact on Your Paycheck

These changes mean:

1. **Slightly Lower Withholding**: Inflation adjustments may reduce your federal tax withholding

2. **Higher Social Security Cap**: High earners will pay more Social Security tax

3. **More Take-Home Pay**: For most workers, these changes result in slightly more take-home pay

What You Should Do

1. **Review Your W-4**: Ensure your withholding is accurate for 2025

2. **Adjust Contributions**: Consider increasing 401(k) or HSA contributions

3. **Plan Ahead**: Use our calculator to estimate your 2025 take-home pay

4. **Consult a Professional**: For complex situations, talk to a tax advisor

Conclusion

The 2025 federal tax bracket changes reflect inflation adjustments that generally benefit taxpayers. Use our paycheck calculator to see exactly how these changes affect your take-home pay.