IRS makes changes that will affect your taxes this year and next

2025-10-12

The IRS on Thursday announced adjustments it is making to a host of line items on your federal tax return for this year and next. Those updates are the result of changes in inflation but also due to provisions in the new tax law enacted in July.

How the adjustments will affect you has everything to do with what deductions you take and what your taxable income will be.

But, generally speaking, “many taxpayers will see modest ‘relief’ simply because the deductions and thresholds move upward. Inflation will take less of a bite,” said Tom O’Saben, director of tax content at the National Association of Tax Professionals.

For tax year 2025, returns for which will be due in April of next year, the new tax law raised the standard deduction to $15,750 for single filers, up from the $15,000 that had previously been scheduled. For married couples filing jointly, it will be $31,500, up from $30,000. And for heads of households, their standard deduction will be $23,625, up from $22,500.

From there, for tax year 2026, the IRS is adjusting the standard deduction for inflation — something it does every year. As a result, the standard will rise to $16,100 for single filers; $32,200 for joint filers; and $24,150 for heads of households.

In 2026, you will pay:

10%: On the first $12,400 of taxable income ($24,800 for joint filers).
12%: On income over $12,400 ($24,800 for joint filers).
22%: On income over $50,400 ($100,800 for joint filers).
24%: On income over $105,700 ($211,400 for joint filers).
32%: On income over $201,775 ($403,550 for for joint filers).
35%: On income over $256,225 ($512,450 for for joint filers).
37%: On income greater than $640,600 ($768,700 for joint filers).

The EITC is an especially valuable credit for low-income households. Credits are a dollar-for-dollar reduction of the taxes you owe. And, since it is a refundable credit, it can increase your refund if you don’t have much or any income tax liability.