With major provisions of the OBBBA taking effect in tax year 2025, American taxpayers will see significant updates to individual tax rates, deductions, and income thresholds. Understanding these changes is essential for planning wages, investments, charitable giving, and retirement income.

Below is a detailed review of ordinary income tax brackets, standard deduction amounts, capital gains rates, and related planning considerations for 2025.

Ordinary Income Tax Rates for 2025

The IRS annually adjusts tax brackets for inflation, and for 2025 they sit on top of the structural changes introduced in prior law.

Marginal rates. For tax year 2025, the top tax rate remains 37% for individual single taxpayers with incomes greater than $626,350 ($751,600 for married couples filing jointly). The other rates are:

Standard Deduction for 2025

The IRS adjusts standard deductions annually for inflation. Notable changes under the One, Big, Beautiful Bill, Additionally, for tax year 2025, the OBBB raises the standard deduction amount to $31,500 for married couples filing jointly. For single taxpayers and married individuals filing separately, the standard deduction for 2025 is $15,750, and for heads of households, the standard deduction is $23,625.

In addition, OBBBA adds new deductions for seniors and targeted income groups.

Under OBBBA, individuals aged 65 and older receive an additional $6,000 deduction (on top of the existing amounts).

Capital Gains Rates for 2025

Capital gains rates are not directly changed by OBBBA; they follow longstanding rules tied to income levels.

Rates apply to assets held one year or more.

There are a few exceptions where capital gains may be taxed at rates greater than 20%:

•Section 1202 qualified small business stock is taxed at a max 28%

•Net capital gains from selling collectibles (coins or art) max 28%

•The portion of any unrecaptured section 1250 gain from selling section 1250 real property is taxed at a maximum 25% rate.

Short-term capital gains are taxed as ordinary income at your regular federal income tax bracket, which can range from 10% to 37%.