Although there are no major changes to the 2024 federal tax laws, the new year brings new tax brackets, deductions, and limits that will impact your 2025 federal income tax return.
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For 2025, Single or Married Filing Separately—$15,000. Married Filing Jointly or Qualifying Surviving Spouse—$30,000. Head of Household—$22,500.
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State and Local Income and RE Tax
State and local tax deduction remains at $10,000 (property plus choice of income or sales taxes, as under current law), except for taxes paid or accrued in carrying on a trade or business. Certain States provide alternate means to deduct estimated payments
Medical
You can deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). For example, if you have an AGI of $50,000 and $10,000 in total deductible medical expenses, 7.5% of $50,000 is $3,750.
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Income Tax Brackets
In 2024 and 2025, there are seven federal income tax rates and brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Taxable income and filing status determine which federal tax rates apply to you and how much in taxes you'll owe that year.
Capital Gains
For the 2025 tax year, individual filers won't pay any capital gains tax if their total taxable income is $48,350 or less. The rate jumps to 15 percent on capital gains, if their income is $48,351 to $533,400. Above that income level the rate climbs to 20 percent. The 3.8% net investment tax remains for 2025.
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Child Tax Credit
The maximum refundable child tax credit amount was capped at $1,700 per dependent for 2025. All provisions sunset at the end of 2025.
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