By Ibinu Vadakkan Dec 22, 2024
Tax brackets determine how much federal income tax you owe. They’re based on your taxable income.
Good news! Federal tax brackets are adjusted yearly for inflation. 2025 might bring you more take-home pay!
As inflation rises, tax brackets shift, so you might stay in a lower tax bracket, even with a raise.
The federal income tax rates won’t change, but shifting brackets mean more income stays untaxed!
Standard deductions are likely increasing in 2025, which means you keep more of your paycheck.
Even if your income increases, you might not owe as much thanks to adjusted federal tax brackets.
More take-home pay means more room in your budget for savings, fun, or paying down debt.
State income tax rules vary, so check your local rates to see the full picture.