2025 tax rate guide: Changes you need to know
The IRS has announced inflation-related adjustments for the 2025 tax year, introducing several important 2025 tax changes. While higher inflation in recent years led to more substantial changes, the 2025 tax bracket adjustments are approximately 2.78%, a drop from 5.14% in 2024 and 7% in 2023.
These tax inflation adjustments reflect the current economic climate and its impact on taxpayers.
IRS inflation adjustments will impact most taxpayers; however, your personal tax situation will determine the overall impact. Make sure you understand how key changes could affect your overall tax liability, including potential shifts in tax credits and tax deductions.
2025 IRS tax brackets and rates
The top tax rate for single and married filers remains 37% in 2025, although the threshold for the top tax rate now applies to incomes greater than $626,350 for individuals and $751,600 for married couples filing jointly. The rate drops to 35% for incomes over $250,525 for individuals and $501,050 for married couples filing jointly.
Other marginal rates range from 10% to 32%, depending on taxable income. These individual income tax rates are crucial for understanding your tax obligations in 2025.
Download Wipfli's quick 2025 tax rate guide.
Gift, estate and trust taxes
A provision in the Tax Cuts and Jobs Act effectively doubled the lifetime gift and estate exemption amount a taxpayer may gift before the remainder is subject to estate taxes. The lifetime gift and estate tax exemption amount is annually indexed for inflation and, for 2025, increases to $13,990,000. The annual gift exclusion is $19,000 for 2025, up from $18,000 in 2024.
Under current tax law, at the end of 2025, the exclusion amount returns to pre-2018 levels (approximately $7 million, as adjusted for inflation). The tax provision’s reversion creates uncertainty. Taxpayers who intend to make lifetime gifts to lower the value of their estate should not delay their planning to avoid future estate tax liabilities. These potential tax law changes could significantly impact estate planning strategies.
How Wipfli can help
Tax planning can be complex, especially with the numerous 2025 tax changes on the horizon. Working with our experienced tax specialists — who possess deep knowledge of tax law — you can feel confident about the services you receive. We offer solutions that aim to minimize your tax exposure and help you achieve your goals.
Our proactive and comprehensive approach to tax planning means you can take advantage of every available opportunity, including optimizing your use of tax credits and deductions. Use our 2025 quick tax rate guide to stay up to date on key rates and deductions.
Contact us to learn more about how we can help you navigate these tax law changes and prepare for the future.
