What's New with Tax Returns for US Citizens in 2025?

When it's time to file your taxes in 2025, expect some changes that could affect your wallet.

It's crucial to understand these updates to make sure you're not losing money. Some of these modifications might mean you'll owe less tax, letting you keep more of the money you earn.
 

Head's Up: Tax Changes You Need to Know for 2025

While not everyone will see these differences, a lot of Americans will notice them when they do their taxes in 2025. Keep an eye out for the following:
 

Bigger Standard Deductions
 

• If you're filing by yourself, you'll be able to deduct $15,000 from your income before taxes, which is $400 more than before.
• Married and filing jointly? You can deduct $30,000, up by $800.
• For heads of household, the deduction is now $22,500, a $600 increase.

Updated Tax Brackets
 

• The government is adjusting the tax brackets to account for the cost of living going up.
• The highest tax rate of 37% will now kick in for single filers earning more than $626,350, and for married couples filing jointly with incomes over $751,600.

 

More Credit for Your Hard Work
 

• The Earned Income Tax Credit (EITC) has increased, which could mean more money back in your pocket.
• If you're saving for retirement with a 401(k), you can put away an extra $500. And if you're aged 60 to 63, you can add even more — up to $11,250.

Alternative Minimum Tax (AMT) Adjustments

There's a new exemption amount for single filers: $88,100, and for married couples: $137,000. This means more of your money could be safe from the Alternative Minimum Tax.

Deductions for State and Local Taxes (SALT)

The cap on SALT deductions is staying at $10,000, which means you can't deduct more than that for your local and state taxes paid.

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If you're not sure about how to deal with these changes or if you have questions, it might be a good idea to talk to a tax advisor. Remember, these updates are important to consider when filing your taxes in 2025.

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