New year means new tax information and criteria. To help you out, we have these 5 tips for tax preparation in 2025. Keep in mind these are not the numbers for when you complete your 2024 taxes next year, but when you do them in 2026.
1. Be Aware of the New Tax Brackets
We still have standard tax brackets, but they have changed since 2024. So if you’re looking to negotiate a raise at work, make sure it is worth the tax bracket you may be bumped up into.
This is for single tax payers in 2025.
- 10% of taxable income for those earning $0 to $11,925.
- 12% and $1,192.50 of taxable income for those earning $11,926 to $48,475.
- 22% and $5,578.50 of taxable income for those earning $48,476 to $103,350.
- 24% and $17,651 of taxable income for those earning $103,351 to $197,300.
- 32% and $40,199 of taxable income for those earning $197,301 to $250,525.
- 35% and $57,231 of taxable income for those earning $250,526 to $626,350.
- 37% and $188,769.75 of taxable income for those earning more than $626,351.
There are also different brackets for Heads of Households, married filing separately, and married filing jointly. Your bookkeeper can help you determine the best bracket for your situation.
Did you know? The United States government is expected to take in $5.49 trillion for 2025? Most of the revenues comes from individual, payroll, Social Security, Medicare, unemployment, and corporate taxes. Source: The Balance
2. There Are New Trust and Estates Brackets
Those of you with a trust or estate this year should know the new brackets.
- 10% of taxable income for those with $0 to $3,150.
- 24% and $315 of the amount between $3,151 and $11,450.
- 35% and $2,307 of the amount between $11,451 and $15,650.
- 37% and $3,777 of the amount over $15,651.
3. Hooray for New Standard Deductions
We can tell you from experience that many tax payers utilize the standard deductions. There is good news for 2025. The standard deduction is scheduled to increase to $15,000 for 2025. This is up from $14,600 for 2024. This deduction is for single taxpayers and married individuals filing separately. Married couples filing jointly will see their standard deduction rise to $30,000, up from $29,200 from tax year 2024. Heads of households get a new standard deduction of $22,500 for 2025, up from $21,900 from the amount for tax year 2024.
4. New Exemptions and Credits
The Earned Income Tax Credits remain for qualifying taxpayers who have three or more children. The new amount is $8,046 for the tax year 2025, which is up from $7,830 for tax year 2024. Health flexible spending goes up to $3,300, which is an increase from $3,200 in tax year 2024. Unused amount carryover permit rises to $660, which is up from $640 in tax year 2024. There are also changes to medical savings accounts, transportation benefits, foreign earned income, estate tax, gifts, and adoptions.
Feel free to look. The IRS has it’s very own guide to 2025 taxes listed here on on their site.
5. New Business Brackets
Those of you who own sole proprietorships like S Corporations, LLCs, and partnerships may get a deduction of up 20 percent. These are the new numbers for Section 199A – Qualified Business Income Deduction.
- Those married filing separately have a threshold amount of $197,300 and phased in amount of $247,300.
- Those married filing jointly have a threshold amount of $394,600 and phased in amount of $494,600.
- All others have a threshold amount of $197,300 and phased in amount of $247,300.
More Tips for Tax Preparation in 2025
Do you want to make the most of this year with the help of a bookkeeper and expert tax preparation services? Those who live in Houston should contact us at B&J Bookkeeping & Taxes for more information on how we can help manage the new laws for 2025 for your personal and business returns.
