Sarah Gutierrez

Senior Tax Accountant

The President signed the “One Big Beautiful Bill”, a piece of legislation that cements many tax provisions for individuals and families.

If you’ve been following tax policy, you know that many provisions from the 2017 Tax Cuts and Jobs Act (TCJA) were originally set to expire at the end of 2025. This new bill changes that and makes several tax benefits permanent and introduces new deductions.   

Below we break down the key individual tax changes you need to know for 2025 and beyond.

2025 Federal Income Tax Brackets

Before the TCJA, the highest federal income tax rate was 39.6%. The TCJA temporarily lowered it to 37%. Under the OBBBA, that rate and the entire tax bracket structure has been made permanent.

1. 10% – Taxable income up to $11,925 (or $23,850 for Married Filing Jointly, MFJ)
2. 12% – $11,926 to $48,475 ($23,851 to $96,950 for MFJ)
3. 22% – $48,476 to $103,350 ($96,951 to $206,700 for MFJ)
4. 24% – $103,351 to $197,300 ($206,701 to $394,600 for MFJ)
5. 32% – $197,301 to $250,525 ($394,601 to $501,050 for MFJ)
6. 35% – $250,526 to $626,350 ($501,051 to $1,252,700 for MFJ)
7. 37% – Over $626,351 (over $1,252,701 for MFJ)

What does this mean for you? If you’ve been planning around a possible rate increase in 2026, you can breathe easier because these brackets are here to stay.

Standard Deduction for 2025 Updates

The enhanced standard deduction, originally increased under the TCJA and indexed for inflation, will remain permanent and has been increased again for 2025:

• Single / Married Filing Separately: $15,750
• Married Filing Jointly / Qualifying Surviving Spouse: $31,500

New Federal Deduction for Seniors

Beginning in 2025, a new, temporary federal deduction is available for seniors aged 65 and older. This deduction will phase-out at higher income levels and is available whether you claim the standard deduction or itemize:

• $6,000 per eligible individual
• $12,000 for Married Filing Jointly if both spouses qualify

Enhanced Child Tax Credit

Families with children will see an increase in their Child Tax Credit. Beginning in tax year 2025, the credit will increase by $200 per qualifying child, bringing the total to $2,200 per child. This change is permanent.

Charitable Deductions

Beginning in 2026, taxpayers who don’t itemize deductions can still claim up to $1,000 for individuals and up to $2,000 for Married Filing Jointly for certain charitable contributions.

What Should You Do Next

Now is the time to review your 2025 tax plan. With lower rates and new deductions, you may be able to reduce planned tax payments for the remainder of 2025. 

At Cray Kaiser our team is here to help you navigate these changes. Contact us today to discuss how these 2025 tax updates might impact your unique financial situation.