IRS changes tax rules for 2025: Complete list of who will be affected and how

The Internal Revenue Service (IRS) has released its full list of changing tax rules for 2025, and Americans will likely see major updates to the standard deduction and certain tax credits.

The IRS annually updates its inflation adjustments for each tax, and the new rules will go into effect for tax returns filed beginning with the 2026 filing season.

In 2026, for the 2025 tax year, the standard deduction was increased by $400, bringing it to $15,000 for single filers. Married couples filing jointly will receive a standard deduction of $30,000, an increase of $800 from 2024.

“The higher standard deduction benefits those who do not itemize by allowing them to claim a larger deduction, reducing their taxable income,” said Kevin Thompson, financial expert and founder and CEO of 9i Capital Group Newsweek. “However, it affects taxpayers in high cost of living states such as New York and California, where property taxes are higher.”

The standard deduction applies to the portion of your income that is not subject to tax, essentially reducing the amount of your taxable income.

For heads of household in 2025, the standard deduction is $22,500, $600 more than in the 2024 tax year.

Marginal tax rates will also be crucial in 2025. While the top tax rate for single filers earning more than $626,350 will remain at 37 percent, there are important numbers to consider for taxpayers with different incomes.

The remaining marginal rates for the 2025 tax year are as follows:

• 35 percent for income over $250,525 ($501,050 for married couples filing jointly).
• 32 percent for incomes over $197,300 ($394,600 for married couples filing jointly).
• 24 percent for incomes over $103,350 ($206,700 for married couples filing jointly).
• 22 percent for incomes over $48,475 ($96,950 for married couples filing jointly).
• 12 percent for income over $11,925 ($23,850 for married couples filing jointly).
• 10 percent for income of $11,925 or less ($23,850 or less for married couples filing jointly).

“The jump from 37 percent to 39.6 percent at the top might grab headlines, but it's the bracket creep that will affect more Americans,” said Michael Ryan, financial expert and founder of michaelryanmoney.com Newsweek. “Many of my former clients in the 24 percent range could be pushed to 28 percent.”

While the marginal tax rate for top earners has been 30 percent since 2000, it has historically risen from the 1940s to the 1960s until the 1990s.

There will also be different minimum allowances in 2025.

For unmarried individuals, the exemption increases to $88,100 ($68,650 for married filing separately) and ends at $626,350. For married couples filing jointly, the exemption increases to $137,000 and starts at $1,252,700.

Taxpayers who receive an earned income credit if they have three or more children will receive a new maximum tax credit of $8,046. That's an increase of $7,830 for the 2024 tax year.

Meanwhile, those with a health savings account must report a minimum annual self-insurance deductible of $2,850 and a maximum deductible of $5,700.

The adoption credit is also changing next year, with the maximum credit now up to $17,280 for those who adopt a child with special needs.

The rules for personal exemption, itemized deduction and lifelong learning credits remain unchanged. This means that there is still no limit on the number of itemized deductions for the 2025 tax year.

“These changes are not just abstract policies, but kitchen table issues that impact the budgets of real families,” Ryan said. “I have sat at countless kitchen tables helping families plan for tax changes, and the key has always been proactive planning, not reactive confusion.”