The modifications that are approaching every time the IRS, Internal Revenue Service, announces the date close to the filing of the tax return, brings complications and questioning as a result of the system. On this occasion, there is a tax change that will become effective in 2025 and is related to the change in tax rates and deductions, which will also have a striking increase that can be beneficial for taxpayers. In this article, we will detail what may be good news for you as a taxpayer and how to take advantage of the changes or not overlook what may be detrimental to your economy.
Tax Changes for 2025
The IRS has made it clear that standard deductions will increase in a measured, but substantial way. While it was confirmed that this will take effect in 2025, by 2026 they expect it to be similar and benefit singles, married people and other types of social representations in the United States. With this, it will be a great decision to take a standard deduction to get either a high refund or to minimize debts in the family economy. On the other hand, and just as important, there is a significant change in IRS tax rates for the 2025 tax year. Thus, the value that you should allocate to taxes will be higher or lower depending on the annual income you have.
To break it all down a little further, those with an income over $11,600 who are single or those filing jointly as a married couple with an income over $23,200 will allocate 10% of the IRS tax rate for the tax year. If the income is higher, the percentage will go up and you will have to allocate more of your estate to pay taxes as a taxpayer. As it happens with the group of singles with incomes over $243,000 or married people with $487,450 per year, who will pay a 35% tax rate.
These percentages have had changes with respect to the ranges previously established by the IRS, since your income will be key to know if you move to another bracket or stay in the same one. What is clear is that you have to make sure you pay the corresponding taxes, in order to also have a deduction in order and concordance.
More IRS modifications
As well as deductions or modifications in the tax brackets, the AMT, also known as Alternative Minimum Tax, may have an exemption in certain cases of taxpayers by 2025. In this way, many will say goodbye to a tax that reduced their economic capacity. It has also come to light that the Earned Income Tax Credit, known as EITC, will be earmarked again, as it already happened in 2024, for 2025, and thus the IRS will allocate an amount to people with children who have fewer resources.
For this, as a key requirement, you must have your tax return for each year in order and your taxes up to date.
