List of cost-of-living adjustments published by Internal Revenue Service for 2025

The Internal Revenue Service (IRS) has published a list of cost-of-living adjustments (COLAs) for 2025. The list includes the amounts of the adjustments for various tax parameters, such as the standard deduction, personal exemption, and tax brackets. The list is based on the Consumer Price Index for Urban Consumers (CPI-U), which is a measure of inflation. The IRS uses the CPI-U to adjust tax parameters for inflation on an annual basis. The standard deduction is increasing by $200 for single taxpayers and by $400 for married taxpayers filing jointly. The personal exemption is increasing by $50. The tax brackets are also being adjusted for inflation. The marginal tax rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%) will apply to the following income ranges: 10% tax bracket: $0-$9,950 12% tax bracket: $9,950-$40,525 22% tax bracket: $40,525-$86,375 24% tax bracket: $86,375-$164,925 32% tax bracket: $164,925-$209,425 35% tax bracket

List of cost-of-living adjustments published by Internal Revenue Service for 2025


The Internal Revenue Service (IRS) has announced the annual cost-of-living adjustments (COLAs) for tax brackets and other key tax items for 2023. The COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) released by the Bureau of Labor Statistics.

The IRS has announced the annual cost-of-living adjustments (COLAs) for tax brackets and other key tax items for 2023. The COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) released by the Bureau of Labor Statistics.

The COLAs for 2025 are as follows:

The standard deduction for married couples filing a joint return will increase to $24,000, up from $23,800 in 2022.

The standard deduction for heads of household will increase to $18,650, up from $18,350 in 2022.

The standard deduction for single taxpayers and married taxpayers filing separately will increase to $12,550, up from $12,400 in 2022.

The personal exemption for taxpayers, their spouses, and their dependent children will increase to $4,050, up from $4,000 in 2022.

The alternative minimum tax (AMT) exemption amount for taxpayers filing a joint return will increase to $112,500, up from $111,700 in 2022. For taxpayers filing a single return, the AMT exemption amount will increase to $82,500, up from $81,900 in 2022.

The tax bracket thresholds for the four tax rates will increase for 2023 as follows:

The maximum earnings subject to the Social Security payroll tax will increase to $142,800, up from $140,000 in 2022.

The thresholds for the itemized deduction phase-out and the Pease limitation on itemized deductions will increase for 2023.

The threshold for the foreign earned income exclusion will increase to $127,200, up from $124,900 in 2022.

The earned income credit (EIC) maximum credit amount will increase to $6,728, up

How the cost-of-living adjustments may affect your taxes


When it comes to your taxes, the cost-of-living adjustments (COLAs) announced by the Internal Revenue Service (IRS) each year may have an impact. The IRS uses the Consumer Price Index for Urban Consumers (CPI-U) to determine whether there should be any adjustments made to the tax code. If the CPI-U goes up, then the IRS may make some changes to the tax code in order to keep up with the rising cost of living.

Here are some of the ways that the cost-of-living adjustments may affect your taxes:

1. The standard deduction may increase.

If the cost of living goes up, the IRS may adjust the standard deduction accordingly. For example, for 2020, the standard deduction is $12,400 for single taxpayers and $24,800 for married couples filing jointly. If the cost of living increases by 2%, then the standard deduction for 2021 could go up to $12,736 for single taxpayers and $25,344 for married couples filing jointly.

2. The tax brackets may change.

The IRS may also adjust the tax brackets each year based on the cost of living. The tax brackets are the income ranges that are taxed at different rates. For example, for 2020, the tax bracket for single taxpayers is 10% for incomes up to $9,875, and it goes up to 37% for incomes over $510,300. If the cost of living increases by 2%, then the tax bracket for 2021 could go up to 10.2% for incomes up to $10,036, and it could go up to 37.4% for incomes over $518,450.

3. The income thresholds for the earned income tax credit (EITC) may change.

The EITC is a tax credit for low- and moderate-income taxpayers. To qualify for the EITC, you must have earned income from working. The amount of the credit depends on your income, filing status, and the number of children you have.

For 2020, the income thresholds for the EITC are $15,820 for single taxpayers with no children, $41,756

What to do if your income has changed since the last cost-of-living adjustment


If your income has changed since the last cost-of-living adjustment (COLA), there are a few things you can do to make sure you’re still getting the most accurate tax refund.

The first thing you should do is update your W-4 form with your new income information. This will ensure that your employer is withholding the correct amount of taxes from your paycheck.

You can also adjust your withholding amount by using the IRS Withholding Calculator. This tool will help you determine how much you should have withheld from your paycheck based on your current income and filing status.

If you find that you owe taxes after updating your W-4 or using the withholding calculator, you can make a quarterly estimated tax payment to the IRS. This will help you avoid any penalties or interest charges on your taxes.

If you’re due a refund after making these changes, you can expect to receive it within 8-12 weeks.

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