The IRS has released (Rev. Proc. 2040-40) the annual tax inflation adjustments for 2025. An extensive list of the updates can be found in the Rev. Proc., but see the table below for an overview of important items and a comparison to the 2024 amounts:
|
|
2025 |
2024 |
|
Standard Deduction |
$30,000 (married filing jointly) $15,000 (single) $15,000 (married filing separately) $22,500 (head of household) |
$29,200 (married filing jointly) $14,600 (single) $14,600 (married filing separately) $21,900 (head of household) |
|
Alternative Minimum Tax Exemption |
$88,100 with phase out beginning at $626,350 for single filers. For joint filers, the exemption is $137,000 with phase out beginning at $1,252,700. |
$85,700 with phase out beginning at $609,350 for single filers. For joint filers, the exemption is $133,300 with phase out beginning at $1,218,700. |
|
Earned Income Tax Credit Maximum |
$8,046 |
$7,830 |
|
Monthly limitation on qualified transportation fringe benefit and qualified parking |
$325 |
$315 |
|
Limit on employee salary reductions for contributions to health flexible spending accounts |
$3,300 ($660 maximum carryover amount) |
$3,200 ($640 maximum carryover amount) |
|
Foreign Earned Income Exclusion |
$130,000
|
$126,500.
|
|
Lifetime exclusion for estate and gifts |
$13,990,000 |
$13,610,000 |
|
Annual gift exclusion |
$19,000 |
$18,000 |
|
Top marginal rates |
37% with income over $626,350 (single)
37% with income over $751,600 (married filing jointly) |
37% with income over $609,350 (single)
37% with income over $731,200 (married filing jointly) |
|
Section 179 Limit |
$1,250,000, reduced by the amount the cost exceeds $3,130,000 |
$1,220,000 reduced by the amount the cost exceeds $3,050,000 |
|
QBI (199A) |
$394,600 threshold (married filing jointly) $197,300 threshold (married filing separately) $197,300 threshold (all other returns) |
$383,900 threshold (married filing jointly) $191,950 threshold (married filing separately) $191,950 threshold (all other returns) |
|
Section 448 limit (also determines exemption from Sec. 163(j) interest deduction limits) |
$31,000,000 |
$30,000,000 |
|
Excess business loss limits |
$313,000 ($626,000 for joint returns) |
$305,000 ($610,000 for joint returns) |
|
Penalty for failure to file S Corporation & Partnership returns |
$255 per month, per K-1 |
$245 per month, per K-1 |
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