The IRS has released its annual inflation adjustments for over 60 tax provisions for tax year 2025, impacting returns filed in 2026.
Key changes include an increase in the standard deduction for married couples to $30,000, up $800, and for single taxpayers to $15,000, up $400.
The top tax rate remains at 37% for individuals earning over $626,350. Additionally, the maximum earned income tax credit for qualifying taxpayers with three or more children will rise to $8,046, up from $7,830.
The annual exclusion for gifts increases to $19,000 for calendar year 2025. Other adjustments include changes to health flexible spending arrangements and the foreign earned income exclusion, which will increase to $130,000. Read more.