Major Tax Changes for 2024-2025: What You Need to Know Before Filing Your Return

As the 2025 tax filing season approaches, the IRS has announced significant changes to tax brackets, standard deductions, and credits for tax years 2024 and 2025. With inflation impacting everyday expenses, these updates could affect how much Americans owe or save when filing their taxes.

Tax Brackets for 2024

For tax year 2024, the IRS has adjusted its seven tax brackets to account for inflation:

• 37%: Single income over $609,350; married couples filing jointly over $731,200.
• 35%: Single income over $243,725; married couples filing jointly over $487,450.
• 32%: Single income over $191,950; married couples filing jointly over $383,900.
• 24%: Single income over $100,525; married couples filing jointly over $201,050.
• 22%: Single income over $47,150; married couples filing jointly over $94,300.
• 12%: Single income over $11,600; married couples filing jointly over $23,200.
• 10%: Single income of $11,600 or less; married couples filing jointly under $23,200.

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Standard Deductions for 2024

The standard deductions also saw increases for tax year 2024:

• Single filers/married filing separately: $14,600 (up $750 from 2023).
• Married filing jointly: $29,200 (up $1,500).
• Head of household: $21,900 (up $1,100).

Key Adjustments in Tax Credits and Exemptions

Earned Income Tax Credit (EITC): Maximum amount for taxpayers with three or more qualifying children increased to $7,830 (up $400 from 2023).
Alternative Minimum Tax (AMT) Exemption: Increased to $85,700, phasing out at $609,350 for individuals. For married couples filing jointly, the exemption rose to $133,300, with a phase-out starting at $1,218,700.

Health Savings Accounts (HSAs)

Employee contribution limit: Increased to $3,200 for self-only coverage.
Family coverage out-of-pocket maximum: Increased to $10,200, up $550 from 2023.

Tax Brackets for 2024

For tax year 2025:

Standard deductions:

• Single filers/married filing separately: $15,000 (up $400).
• Married filing jointly: $30,000 (up $800).
• Head of household: $22,500 (up $600).

Tax brackets:

• 37%: Single income over $626,350; married couples filing jointly over $751,600.
• 35%: Single income over $250,525; married couples filing jointly over $501,050.
• 32%: Single income over $197,300; married couples filing jointly over $394,600.
• 24%: Single income over $103,350; married couples filing jointly over $206,700.
• 22%: Single income over $48,475; married couples filing jointly over $96,950.
• 12%: Single income over $11,925; married couples filing jointly over $23,850.
• 10%: Single income of $11,925 or less; married couples filing jointly under $23,850.

The Earned Income Tax Credit for 2025 will also rise, with the maximum amount for taxpayers with three or more children increasing to $8,046.

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FAQs:

What is the Alternative Minimum Tax (AMT) exemption for 2024?
The AMT exemption for 2024 is $85,700 for single filers and $133,300 for married couples filing jointly.

What does the future of tax changes look like in 2025?
In 2025, the IRS will continue the trend of raising tax brackets, with a higher standard deduction and slightly higher tax brackets for single and married filers.