What's My 2025 Tax Bracket?

Understanding your tax bracket is crucial for effective financial planning in 2025 and beyond. Tax brackets are adjusted annually due to inflation and policy changes. Here, we outline the tax brackets for 2025 and some ways to reduce your taxable income.

2025 Federal Income Tax Brackets

The IRS adjusts tax brackets annually based on inflation, and for 2025, here are the tax rates for different income levels:¹

Single Filers:

37% for incomes over $626,250
35% for incomes over $250,525
32% for incomes over $197,300
24% for incomes over $103,350
22% for incomes over $48,475
12% for incomes over $11,925
10% for incomes $11,925 or less

Married Filing Jointly:

37% for incomes over $751,600
35% for incomes over $501,050
32% for incomes over $394,600
24% for incomes over $206,700
22% for incomes over $96,950
12% for incomes over $23,850
10% for incomes $23,850 or less

How Tax Brackets Work

You may think that if your income falls into a certain tax bracket, your entire income is taxed at that rate. However, the U.S. uses a marginal tax system, which means that only the income within each bracket is taxed at that rate. For example, if you’re a single filer earning $50,000, only the portion of your income above $48,475 is taxed at 22%, while the lower portions are taxed at the corresponding lower rates.

Standard Deductions for 2025

The standard deduction reduces your taxable income, which can significantly impact the tax you owe. For 2025, the standard deductions are:¹

Single: $15,000
Married Filing Jointly: $30,000
Head of Household: $22,500

If your itemized deductions exceed the standard deduction, it may be beneficial to itemize, especially if you own a home, have high medical expenses, or make significant charitable contributions.

How to Reduce Your Tax Burden

While tax brackets determine how much you owe, several strategies can reduce your taxable income and keep more money in your pocket. Here are just a few strategies to consider:

Contribute to Retirement Accounts
Contributing to tax-advantaged retirement accounts—such as a 401(k) or an Individual Retirement Account (IRA)—can help reduce your taxable income.

2025 Contribution Limits:

401(k), 403(b), 457 Plans, and Thrift Savings Plan:

Employee Contribution Limit: $23,500 (up from $23,000 in 2024)
Catch-Up Contribution (Age 50+): Additional $7,500 (unchanged from 2024)
Special Catch-Up (Ages 60–63): Additional $11,250, allowing contributions up to $34,750 for eligible participants

Traditional and Roth IRAs:

Contribution Limit: $7,000
Catch-Up Contribution (Age 50+): Additional $1,000, for a total of $8,000

Maximizing contributions to these retirement accounts not only boosts your retirement savings but also provides immediate tax benefits. Be sure to check eligibility and income limits with your tax professional, especially for Roth IRAs and deductible traditional IRA contributions.

Use a Health Savings Account (HSA)
If you have a high-deductible health plan, contributing to an HSA offers tax advantages. The 2025 contribution limits are $4,300 for individuals and $8,550 for families.³However, if you're 55 or older, you can make a $1,000 catch-up contribution that's added to whichever limit applies to you.

Take Advantage of Tax Credits
Tax credits directly reduce your tax bill rather than just your taxable income. Popular credits include:

Child Tax Credit: Provides up to $2,000 per qualifying child under age 17.⁴
Earned Income Tax Credit (EITC): For qualifying taxpayers who have three or more qualifying children, the tax year 2025 maximum Earned Income Tax Credit amount is $8,046.¹
American Opportunity Tax Credit: This tax credit helps students and parents with education costs, offering up to $2,500 per eligible student for tuition, fees, and course materials.⁵

Consider Tax-Loss Harvesting
If you have investment losses, you can use them to offset capital gains and reduce your tax burden. Up to $3,000 of excess losses can be deducted against ordinary income per year.⁶

When you understand your tax bracket and utilize tax-saving strategies, you can make informed financial decisions and keep more of your hard-earned money. As always, talk to your tax professional to help you maximize your deductions and credits while staying compliant with IRS regulations.

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Since 2004, TCM Wealth Advisors has been providing Fee-Only Fiduciary Advice to our clients in Northeast Ohio (Akron/Canton, Cleveland), and around the country.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.