Here’s what you need to know before you file

On By Littum

With January only weeks away and inflation still affects Americans’ walletsare taxpayers across the country ready to file in 2025.

To ease the transition, the Internal Revenue Service announces inflation adjustments each year and notes adjustments for more than 60 tax provisions.

The The IRS released figures for the 2024 tax year last year, urged most taxpayers to pay close attention to the standard deduction for single and married filers.

For single taxpayers and married individuals filing separately, the standard deduction rose to $14,600, an increase of $750 from the 2023 tax year, the IRS reported. For married couples filing jointly for the 2024 tax year, the deduction increased to $29,200, an increase of $1,500 from the 2023 tax year, the IRS said. The IRS noted that for the head of the household, the standard deduction increased $1,100, for a total of $21,900.

Here are other changes to keep in mind during tax season.

IRS tax rates for tax year 2024

The IRS announced tax rates for its seven tax brackets for the 2024 tax year:

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

Tax exemptions and deductions

One change noted by the IRS concerns the alternative minimum tax exemption (AMT). Some tax benefits can significantly reduce a taxpayer’s ordinary tax amount. The AMT is applied to high-income taxpayers by limiting these benefits, ensuring that these high-income taxpayers pay at least a minimum amount in taxes, the IRS said on its website.

The AMT exemption amount for tax year 2024 increased to $85,700 and begins to phase out at $609,350, an increase of $4,400 and $31,200, respectively, compared to tax year 2023. The exemption amount for married couples filing jointly increased to $133,300 and begins to phase out at $1,218,700, a increase on $6,800 and $62,400 compared to tax year 2023, the IRS said.

The tax year 2024 maximum earned income tax credit for taxpayers with three or more qualifying children is $7,830, an increase of $400 from the tax year 2023.

An IRS spokesman said that based on public statistics, out of 153.8 million tax returns, fewer than 180,000 taxpayers paid the alternative minimum tax in 2023. The numbers could be higher, although the numbers were only crunched through November.

What about my health savings account contribution?

For the 2024 tax year, the limit on employee health savings account contributions is set to increase to $3,200, the IRS announced last November.

For tax year 2024, those with deductibles only in a medical savings account have a maximum spending amount of $5,550, up $250 from 2023.

Family coverage for tax year 2024 includes a spending limit of $10,200 (an increase of $550 from tax year 2023).

Will tax levels change for tax year 2025?

In October, the IRS also released information about changes affects taxpayers for tax year 2025 or when they file their tax beginning in January 2026.

Changes taxpayers may be looking for include another increase for single taxpayers and married people filing separately. The standard deduction will increase to $15,000, an increase of $400 from this year, the IRS said.

For married couples filing jointly, the standard deduction will be $30,000, an increase of $800, and for heads of household, the standard deduction will increase to $22,500, an increase of $600.

Garnishments for singles and married couples filing jointly, according to the IRS, include:

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

According to the IRS, for qualified taxpayers with three or more qualifying children, the new maximum Earned Income Tax Credit amount will be $8,046, an increase of $216 from the 2024 tax year.

Saleen Martin is a reporter on USA TODAY’s NOW team. She is from Norfolk, Virginia – on 757. Follow her on Twitter at @SaleenMartin or email her at [email protected].