Each fall, the IRS updates tax brackets for inflation—but in 2025, things look a little different. That’s because the One Big Beautiful Bill Act (OBBBA) added new provisions on top of the standard adjustments, giving taxpayers more deductions and wage earners fresh perks.

Here’s what changed, what it means for your 2025 tax return, and why planning now matters—especially with many provisions set to expire after 2025.

2025 Standard Deductions (OBBBA-Adjusted)

The standard deduction increased for inflation and was expanded under OBBBA:

Single / Married Filing Separately: $15,300 (up from $14,600)
Married Filing Jointly: $30,600 (up from $29,200)
Head of Household: $22,950 (up from $21,900)

Bonus for Seniors

Taxpayers 65 and older now get an additional $6,000 deduction through 2028.

That means a married couple filing jointly, both over 65, could deduct $42,600 before itemizing.

2025 Marginal Tax Brackets

The tax rates (10% to 37%) remain unchanged, but the income thresholds increased for inflation.

New Perks for Wage Earners in 2025 (OBBBA)

Alongside higher brackets and deductions, OBBBA created new deductions and exclusions for working Americans:

Overtime Pay: Up to $12,500 of overtime income is now tax-free through 2028.
Tips: Up to $25,000 in tips are excluded from taxable income.
Auto Loan Interest: Interest on loans for U.S.-assembled vehicles is now deductible.

These provisions directly lower taxable income—putting more money back in the pockets of wage earners.

Why These Changes Matter

More Income Sheltered: Higher standard deductions + new exclusions mean more take-home pay.
Seniors Win Big: Extra $6,000 deduction helps retirees stretch retirement income.
Wage Earners Benefit: Tip and overtime relief provides targeted savings for service workers.
2026 Looms Large: Unless extended, TCJA provisions + some OBBBA benefits will sunset at year-end 2025, potentially raising taxes across the board.

Smart Tax Moves for 2025

Check Withholding & Estimates: Higher deductions may mean less tax owed—adjust your W-4 or estimated tax payments.
Plan Roth Conversions in 2025: Take advantage of relatively lower brackets before 2026 sunsets.
Maximize Deductions: Seniors should factor in the extra $6,000 standard deduction.
Track Tips & Overtime: Keep records to ensure you benefit from OBBBA’s new exclusions.
Consider Timing Income/Deductions: Strategic shifting between 2025 and 2026 could save thousands if rates reset higher.

The 2025 tax brackets and OBBBA changes create major opportunities to lower taxable income—but they also set the stage for uncertainty in 2026. Whether you’re a family, small business owner, or senior, this is the year to plan smarter.

1. Did tax rates change in 2025?
No—rates (10% to 37%) stayed the same, but income thresholds increased.
2. How much is the 2025 standard deduction?
- Single: $15,300
- MFJ: $30,600
- HoH: $22,950
- Seniors 65+ get $6,000 more.
3. What’s new under OBBBA for workers?
Up to $25K in tips and $12.5K in overtime income are excluded from taxes, plus a new deduction for U.S.-assembled car loan interest.
4. Do these benefits continue past 2025?
Not all. The senior deduction continues through 2028, but many OBBBA wage-earner perks sunset after 2025 unless renewed.
5. Why plan now?
Because 2026 may bring higher taxes if TCJA and OBBBA provisions expire. Planning income and deductions now could save thousands.

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2025 IRS Tax Brackets & Rates — Updated With OBBBA Changes