Bloomberg Tax & Accounting released its 2025 Projected U.S. Tax Rates, which indicate inflation-adjusted amounts in the tax code will increase 2.8% from 2024. This is about half the increase in 2024, and a significant drop from the 7.1% increase in 2023.
Bloomberg Tax’s annual Projected U.S. Tax Rates Report provides early, accurate notice of the potential tax savings that could be realized due to increases in deduction limitations, upward adjustments to tax brackets, and increases to numerous other key thresholds.
The report accounts for changes made under the SECURE 2.0 Act that affect tax planning for corporate taxpayers in certain industries. They include an increase in the threshold amount for qualified salary reduction arrangements under §408(p) from $5,000 to $5,100 and an increase in the qualified long-term care distribution amount under §401(a) from $2,500 to $2,600.
This year’s report projects that several key deductions for taxpayers will see notable year-over-year increases, with the foreign earned income exclusion increasing from $126,500 to $130,000, and the annual exclusion for gifts increasing from $18,000 to $19,000, thereby allowing taxpayers to increase their gifts without tax implications.
“Year after year, our annual report equips tax professionals and taxpayers with crucial forecasts to prepare for the forthcoming year, ahead of the IRS’s official declaration,” said Heather Rothman, Vice President, Analysis & Content, Bloomberg Tax & Accounting. “As inflation continues to impact the tax code, Bloomberg Tax & Accounting offers the research and tools to solve day-to-day workflow issues by providing intelligence exactly where users need it.”
The updated rates flow directly into Bloomberg Tax’s innovative software solutions including Bloomberg Tax Provision, Bloomberg Tax Fixed Assets, and Bloomberg Tax Workpapers. This is an example of the power and efficiency of Bloomberg Tax & Accounting’s integrated suite of solutions, which modernizes the corporate tax process, from data collection to tax calculations that power key deliverable.
The full report is available here.
Other key adjustments, with comparisons of the 2024 amounts and 2025 projections, include:
Individual Income Tax Rate Brackets
|
Married Filing Jointly and Surviving Spouses |
|
|
2024 Tax Rate Bracket Income Ranges |
Projected 2025 Tax Rate Bracket Income Ranges |
|
10% – $0 to $23,200 |
10% – $0 to $23,850 |
|
12% – Over $23,200 to $94,300 |
12% – Over $23,850 to $96,950 |
|
22% – Over $94,300 to $201,050 |
22% – Over $96,950 to $206,700 |
|
24% – Over $201,050 to $383,900 |
24% – Over $206,700 to $394,600 |
|
32% – Over $383,900 to $487,450 |
32% – Over $394,600 to $501,050 |
|
35% – Over $487,450 to $731,200 |
35% – Over $501,050 to $751,600 |
|
37% – Over $731,200 |
37% – Over $751,600 |
|
Unmarried Individuals (other than Surviving Spouses and Heads of Households) |
|
|
2024 Tax Rate Bracket Income Ranges |
Projected 2025 Tax Rate Bracket Income Ranges |
|
10% – $0 to $11,600 |
10% – $0 to $11,925 |
|
12% – Over $11,600 to $47,150 |
12% – Over $11,925 to $48,475 |
|
22% – Over $47,150 to $100,525 |
22% – Over $48,475 to $103,350 |
|
24% – Over $100,525 to $191,950 |
24% – Over $103,350 to $197,300 |
|
32% – Over $191,950 to $243,725 |
32% – Over $197,300 to $250,525 |
|
35% – Over $243,725 to $609,350 |
35% – Over $250,525 to $626,350 |
|
37% – Over $609,350 |
37% – Over $626,350 |
Standard Deduction
|
Filing Status |
2024 Standard Deduction |
Projected 2025 Standard Deduction |
|
Married Filing Jointly/Surviving |
$29,200 |
$30,000 |
|
Heads of Household |
$21,900 |
$22,500 |
|
All Other Taxpayers |
$14,600 |
$15,000 |
Alternative Minimum Tax (AMT)
|
Filing Status |
2024 AMT Exemption Amount |
Projected 2025 AMT Exemption Amount |
|
Married Filing Jointly/Surviving |
$133,300 |
$137,000 |
|
Unmarried Individuals (other than Surviving Spouses) |
$85,700 |
$88,100 |
|
Married Filing Separately |
$66,650 |
$68,500 |
|
Estates and Trusts |
$29,900 |
$30,700 |
