As of 2025, many parts of the U.S. tax system still reflect changes made under the Tax Cuts and Jobs Act (TCJA) of 2017. While some of those provisions are set to expire in the near future, they remain in place for the current tax year. For individuals and businesses alike, understanding which tax policies are still active can help with filing and financial planning.
Individual Tax Rates and Brackets in 2025
The federal income tax system in 2025 continues to use a tiered structure with seven tax brackets, ranging from 10% to 37%. These rates have remained consistent since their introduction under the Tax Cuts and Jobs Act (TCJA) of 2017. The IRS adjusts the income thresholds annually to account for inflation, helping to prevent “bracket creep.”
Here are the 2025 federal tax brackets:
Single Filers
- 10% on income up to $11,925
- 12% on income from $11,926 to $48,475
- 22% on income from $48,476 to $103,350
- 24% on income from $103,351 to $197,300
- 32% on income from $197,301 to $250,525
- 35% on income from $250,526 to $626,350
- 37% on income over $626,350
Married Filing Jointly
- 10% on income up to $23,850
- 12% on income from $23,851 to $96,950
- 22% on income from $96,951 to $206,700
- 24% on income from $206,701 to $394,600
- 32% on income from $394,601 to $501,050
- 35% on income from $501,051 to $751,600
- 37% on income over $751,600
These rates apply only to federal income taxes. State tax systems may have their own brackets and rules.
Standard Deduction and Personal Exemptions
In 2025, the standard deduction remains the primary way most taxpayers reduce their taxable income. This deduction amount is automatically applied unless you choose to itemize, which fewer people do under current tax law.
2025 Standard Deduction Amounts
- Single filers: $15,000
- Married filing jointly: $30,000
- Head of household: $22,500
- Married filing separately: $15,000
These amounts are adjusted annually for inflation. If you’re 65 or older or blind, you may qualify for an additional deduction:
- Single or Head of Household: Additional $2,000
- Married Filing Jointly or Separately: Additional $1,600 per qualifying individual
What About Personal Exemptions?
Personal exemptions were eliminated under the 2017 Tax Cuts and Jobs Act and remain at $0 for the 2025 tax year. This means you cannot claim a separate exemption for yourself, your spouse, or your dependents. The higher standard deduction was intended to offset this change.
Tax Credits Still in Effect
Several widely used federal tax credits remain in place for the 2025 tax year. These credits can reduce the amount of tax you owe or increase your refund, depending on your income and eligibility.
Child Tax Credit (CTC)
The Child Tax Credit in 2025 remains at the levels set by the Tax Cuts and Jobs Act (TCJA):
- Up to $2,000 per qualifying child under age 17
- Up to $1,700 of the credit is refundable (meaning you can receive it even if you don’t owe taxes)
- Phases out for higher-income earners, starting at:
- $400,000 for married couples filing jointly
- $200,000 for all other filers
Earned Income Tax Credit (EITC)
The EITC remains available to low- and moderate-income workers. The amount depends on your income, filing status, and number of qualifying children. For 2025, the maximum EITC amounts are approximately:
- No children: up to $649
- One child: up to $4,328
- Two children: up to $7,152
- Three or more children: up to $8,046
To claim the EITC, you must meet certain income and eligibility requirements. You can check the IRS EITC Assistant to see if you qualify.
Education Credits
The American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) are still available:
- AOTC: Up to $2,500 per eligible student for the first four years of higher education
- LLC: Up to $2,000 per tax return for qualified education expenses
These credits are subject to income limits and other eligibility rules.
What’s Happening With SALT Deductions?
The State and Local Tax (SALT) deduction allows taxpayers to deduct certain state and local taxes—such as income, property, or sales taxes—from their federal taxable income. However, a cap introduced in 2018 remains in effect for the 2025 tax year.
SALT Deduction Cap for 2025
- The deduction is capped at $10,000 for all filers except married individuals filing separately, who are limited to $5,000.
- This cap applies regardless of whether the deduction includes state income taxes, property taxes, or sales taxes.
- It applies to both itemizers and higher-income households in high-tax states.
Unless a new bill is passed, this $10,000 limit is scheduled to expire after tax year 2025, along with several other TCJA provisions.
Who This Affects
Taxpayers in states with high income or property taxes—such as California, New York, and New Jersey—are most impacted. The cap can significantly reduce the value of itemizing deductions for those individuals.
Business Tax Provisions in 2025
Several key provisions affecting business taxes remain in effect for the 2025 tax year. These rules continue to influence how corporations and small businesses calculate their tax liability.
Corporate Tax Rate
The federal corporate income tax rate remains at 21% for 2025.
Bonus Depreciation
- Bonus depreciation allows businesses to deduct a percentage of the cost of qualifying property in the year it is placed in service.
- In 2025, the bonus depreciation rate is 40%, down from 60% in 2024.
- This rate is scheduled to decrease to 20% in 2026 and phase out entirely by 2027 unless new legislation is enacted.
Section 179 Deduction
- The maximum Section 179 expense deduction for 2025 is $1,250,000.
- This limit is reduced dollar-for-dollar when the cost of qualifying property placed in service during the year exceeds $3,130,000.
- These amounts are adjusted annually for inflation.
Pass-Through Deduction (Section 199A)
- Owners of certain sole proprietorships, partnerships, and S corporations can still claim a 20% deduction on qualified business income (QBI).
- For 2025, the income thresholds at which the deduction begins to phase out are:
- $197,300 for single filers
- $394,600 for married couples filing jointly
- This provision is currently scheduled to expire after 2025 unless extended by new legislation.
Wrapping Up
The U.S. tax code in 2025 still reflects many changes made by the Tax Cuts and Jobs Act, with current rules on tax brackets, deductions, credits, and business provisions largely intact. While some of these features are set to expire after this year, they remain active for now.
Understanding which tax policies are in effect can help individuals and businesses make informed decisions during the 2025 tax season. If you’re unsure how current rules apply to your situation, consider using trusted resources like IRS.gov or speaking with a qualified tax professional.
