IRS Announces 2025 Tax Bracket Adjustments
This week, the Internal Revenue Service (“IRS”) announced its annual inflation adjustments for tax year 2025. The IRS announces similar adjustments each fall. The annual changes have been more significant in the last couple of years due to the high rate of inflation following the pandemic. However, the increase to the income thresholds for the 2025 tax brackets is the smallest change in several years. For tax year 2023, the adjustment to the income thresholds was 7%, for tax year 2024, it was 5.4%, and for tax year 2025, it is approximately 2.8%.