Inflation adjustments will continue to shrink, according to Bloomberg Tax & Accounting’s 2025 Projected U.S. Tax Rates.
It projects that inflation-adjusted amounts in the Tax Code will increase 2.8% in 2025 — roughly half the increase in 2024 and down from 7.1% in 2023. Bloomberg Tax’s annual
The report accounts for changes made under the SECURE 2.0 Act that affect tax planning for corporate taxpayers in certain industries, such as the increase in the threshold amount for qualified salary reduction arrangements under Section 408(p) from $5,000 to $5,100, and the increase in the qualified long-term care distribution amount under Section 401(a) from $2,500 to $2,600.
This year’s report projects that several deductions for taxpayers will see notable year-over-year increases. Foreign earned income exclusion increasing from $1126,500 to $130,000, and the annual exclusion for gifts increasing from $18,000 to $19,000, will allow taxpayers to increase their gifts without tax implications.
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 Spouses | $29,200 | $30,000 |
| Heads of Household | $21,900 | $22,500 |
| All Other Taxpayers | $14,600 | $15,000 |
Alternative minimum tax
| Filing Status | 2024 AMT Exemption Amount | Projected 2025 AMT Exemption Amount |
| Married Filing Jointly/Surviving Spouses | $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 |
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