The article discusses the historical context of the federal income tax, established by the 16th Amendment in 1913, and highlights anticipated changes in tax provisions for the tax year 2025. It details modifications in tax brackets, standard deductions, the Alternative Minimum Tax exemption, the Child Tax Credit, the gift and estate exemption, and long-term capital gains tax rates. These adjustments are designed to keep up with inflation and reflect changes that will affect taxpayers when they file in 2026.
Ever wondered how our federal tax code came to be? Well, in 1909, progressives in Congress added an income tax provision to a tariff bill.
Fast forward to late last year, when the IRS shared details about more than 60 tax provisions that will impact taxpayers when they file in 2026 for the 2025 tax year.
Tax Brackets - These are shifting, so your taxable income (after deductions) will be taxed at new rates. Keep in mind, this doesn't include tax credits or self-employment tax.
For married couples filing jointly, the standard deduction is going up to $30,000. Heads of households can expect a $600 increase, bringing it to $22,500.
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