As the new year begins, Americans face numerous tax deadlines to meet. The IRS revises its tax guidelines annually. This annual update can cause significant differences in the amount of money Americans see in their returns and the deadlines they must meet.
To avoid a government shutdown, Congress reduced the IRS’s budget by $80 billion from the anticipated Inflation Reduction Act. This financial shortfall, combined with updated tax tiers and deduction guidelines, could have a significant impact on many Americans’ tax bills.
Important Dates for the 2025 Tax Season
In a few days, Americans will know when the IRS will begin accepting tax returns. Knowing this date gives taxpayers a head start on the filing process. Tax return forms will be released in late January. This will mark the start of the filing season, allowing Americans to submit their taxes on time.
In preparation for the 2025 tax season, Americans should be aware of several important updates and changes. This year, tax returns will be available on January 27 instead of January 29, as in 2024.
Mark your calendars for an additional deadline. Even though Tax Day is on April 15, you have the option to file your taxes before the deadline. This gives you a head start on your financial planning and ensures that everything is in order ahead of time.
What Are the New IRS Rules for 2025?
The IRS regulations for 2025 maintain the same seven income brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. However, it is critical to note the income thresholds for each bracket to determine where you fall.
Marginal Tax Rates for 2025
Here’s a breakdown of the marginal rates for the 2025 tax year:
- 37% for incomes over $626,350
- 35% for incomes over $250,525 ($501,050 for married couples filing jointly)
- 32% for incomes over $197,300 ($394,600 for married couples filing jointly)
- 24% for incomes over $103,350 ($206,700 for married couples filing jointly)
- 22% for incomes over $48,475 ($96,950 for married couples filing jointly)
- 12% for incomes over $11,925 ($23,850 for married couples filing jointly)
- 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly)
Changes in Standard Deductions for 2025
In 2026, the standard deduction for the 2025 tax year will increase. Single filers will see a $400 increase, bringing the deduction to $15,000. Meanwhile, married couples filing jointly will see an increase of $800, bringing their standard deduction to $30,000.
The standard deduction is a crucial part of the tax system, allowing you to reduce your taxable income by exempting a portion of your earnings from taxation.
According to Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, the IRS will likely begin accepting returns on the last or next-to-last Monday of January. Last year, the date was January 29.
This year brings significant changes, including an increase in the standard deduction to account for inflation and a decrease in the threshold for payments received through third-party processors for sales of goods and services.
Taxpayers are reminded that they have until April 15 to file their returns, unless they have received an extension. It is critical to understand that, while an extension may give you more time to file, it does not extend the time to pay any owed taxes.
As a result, any outstanding balances will be assessed fees and penalties.
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