NEW YORK (AP) — U.S. taxpayers will again face higher standard deductions for 2025, allowing them to shelter more of their money from taxes on future returns.

Internal Revenue Service detailed the annual increases inflation adjustments announced On October 22.

The standard deduction for single taxpayers and married individuals who file separately in the 2025 tax year will increase by $400 from 2024 to $15,000.

For couples filing jointly, that standard deduction will be $30,000 for 2025, an increase of $800 from the previous year. Heads of households will receive a standard deduction of $22,500, an increase of $600 from 2024.

Income thresholds for all seven federal tax bracket levels were also revised upward. The top tax rate, which remains at 37%, would cover income above $626,350 for single taxpayers in the 2025 tax year, compared to $609,350 in 2024, for example.

The IRS makes such adjustments for each tax year To account for inflation, which has been on a downward trend lately. Inflation in the USA last month fell to its lowest point Over three years, this points to some encouraging economic news; but Americans still feel some underlying price pressures.

“Core” prices, an indicator of underlying inflation, remained high in September, driven by rising prices for medical care, clothing, auto insurance and airline fares.

Although taxpayers will again face higher standard deductions in 2025, the increases are smaller than in recent years.

In the announced tax regulations last yearFor example, the IRS increased the standard deduction for singles by $750 between the 2023 and 2024 tax years, and by $1,500 and $1,100 for married couples and heads of households, respectively.

Earlier this month, the Social Security Administration made a statement. 2.5% increase in cost of living Starting from January for those who benefit from social rights. That means an average increase of over $50 in monthly checks for millions of people.

Similar to the latest tax cut numbers, the upcoming COLA adjustment is lower than those seen in the recent past. Social Security recipients receive a reward 3.2% increase in social aid In 2024, after a historically large number 8.7% benefit increase In 2023, then brought with a record Highest inflation in 40 years.

The smaller increase next year reflects moderate inflation.

Copyright 2024 Associated Press. All rights reserved.