What is new this year?
- Rise in standard deductions. For married couples filing jointly, the standard deduction increases.
- Alternative minimum tax (AMT) exemption. For tax year 2025, the exemption amount for unmarried individuals increases.
- Earned income tax credit. For qualifying taxpayers who have three or more qualifying children, them maximum Earned Income Tax Credit amount is $8,046 for tax year 2025. This is up from $7,830 for tax year 2024.
- What is not changing?
- The personal exemptions remain at $0 for tax year 2025.
- The elimination of the personal exemption was part of the TCJA.
- The maximum child tax credit is $2,000 per qualifying child, with a refundable amount of $1,700.
- For 2025, the amount individuals can contribute to their 401(k) plans will increase to $23,500.
- In addition, the IRS announced higher income thresholds for Roth IRA contributions.