There have been some changes to the Internal Revenue Service (IRS) inflation adjustments for 2025.

Take a look at a comprehensive overview of key changes below, and please keep in mind that these limits apply for the 2025 tax year, filings for which will occur in 2026.

Standard Deductions

• Single taxpayers and married couples filing individually: The standard deduction will be $15,000, a $400 rise over 2024.
• Married couples filing jointly: The standard deduction will be $30,000, an $800 rise over 2024.
• Heads of households: The standard deduction will be $22,500, a $600 rise over 2024.

Marginal Tax Rate

While tax rates won’t change, tax bracket thresholds have risen, albeit not by as much as in previous years due to cooling inflation.

The 2025 tax brackets and rates are as follows:

• 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly).
• 12% for incomes over $11,925 ($23,850 for married couples filing jointly).
• 22% for incomes over $48,475 ($96,950 for married couples filing jointly).
• 24% for incomes over $103,350 ($206,700 for married couples filing jointly).
• 32% for incomes over $197,300 ($394,600 for married couples filing jointly).
• 35% for incomes over $250,525 ($501,050 for married couples filing jointly).
• 37% for incomes over $626,350 ($751,600 for married couples filing jointly).

Capital Gains Tax Brackets Shift

The IRS increased taxable income limits for capital gains tax brackets, though the tax rates remain the same. For 2025 long-term capital gains, the tax rate is as follows:

• 0% – Single filers with taxable income from $0-$48,349; married joint filers with taxable income from $0-$96,699; heads of household with taxable income $0-64,749.
• 15% – Single filers with taxable income from $48,350-$533,399; married joint filers with taxable income from $96,700-$600,049; heads of household with taxable income from $64,750-$566,699.
• 20% – Single filers with taxable income from $533,400+; married joint filers with taxable income from $600,050+; heads of household with taxable income from $566,700+.

Other Changes to Know

• HSAs: Contribution limits increased to $4,300 for individuals and $8,550 for families.
• FSAs: The limit on payroll contributions will rise to $3,300, up from $3,200 in 2024.
• Earned Income Tax Credit: Qualifying taxpayers with three or more qualifying children now have a maximum credit of $8,046.
• Estate Tax Credits: The federal estate tax exclusion amount will increase to $13.99 million, up from $13.61 million in 2024. The exclusion amount is how much money can be reprieved from the estate tax.
• Gift-Tax Exemption: The first $19,000 of gifts to any person will be exempted from taxation, up from $18,000 in 2024.

If you have any questions about these adjustments, please don’t hesitate to reach out. We are always here as a resource for you.

Thank you for reading!

The Trademark Capital® Team

This material is intended for informational purposes only and should not be construed as legal, accounting, tax, investment, or other professional advice. Trademark Capital’s investment strategies are built using quantitative, proprietary algorithms that are designed to identify and react to changing market conditions. However, investors should be aware that no investment strategy or risk management technique can guarantee returns or eliminate risk in any given market environment. As with all investments, Trademark Capital Management’s investment strategies are subject to risk and may lose money. The investment strategies presented are not appropriate for every investor and individual clients should review with their financial advisors the terms and conditions and risk involved with specific products or services. Due to our active risk management, our managed portfolios may underperform during bull markets. Past performance is no guarantee of future results.