The IRS has released the tax inflation adjustments for the 2025 tax year, impacting various tax brackets, deductions and credits. Here's a quick breakdown of what you need to know:
Standard deduction increase . The standard deduction has risen to $14,600 for individuals, $29,200 for married couples filing jointly and $21,900 for heads of household. This adjustment helps offset inflation, leaving more money in your pocket.
Updated tax brackets Income thresholds for all tax brackets have been adjusted to reflect inflation. This means you may be taxed at a lower rate for the same income compared to previous years. Check the new brackets to see where you fall!
Increased gift tax exclusion The annual gift tax exclusion will rise to $18,000, allowing more tax-free giving to your loved ones.
Higher earned income tax credit (EITC) . The maximum EITC has been adjusted, providing additional support for qualifying low- to moderate-income workers and families.
There are also some changes to retirement contribution limits, education tax credits and the Alternative Minimum Tax (AMT) exemption.
These changes directly impact your tax planning for the upcoming year. Whether you’re a business owner, property investor or individual filer, staying informed about these adjustments can help you maximize your returns and avoid surprises.
What to do with this info?
- Review your tax strategy for 2025 - if you have any doubts, feel free to book a free consultation with us
- Update your payroll withholding or estimated tax payments to reflect these changes.
- Plan for retirement contributions, gifts and other financial goals with the new limits in mind.
Remember: planning now means less stress later. Don’t let taxes sneak up on you and derail your year. With the right strategy and professionals by your side, you can stay on track and even come out ahead.
Learn more at ptc.tax.
