Key Individual Tax Changes
• Individual tax rates. Makes permanent the TCJA’ s individual tax rates:
10 %
FOR INCOMES UP TO $ 11,925
• Standard deduction. Makes permanent the near doubling of the standard deduction. For 2025, the standard deduction increases to $ 15,750 for single filers, $ 23,625 for heads of households and $ 31,500 for joint filers, with annual inflation adjustments going forward.
• Personal exemptions. Makes permanent the elimination of personal exemptions.
• Child tax credit. Permanently increases the credit to $ 2,200, with annual inflation adjustments going forward.
12 %
22 %
FOR INCOMES BETWEEN $ 11,925- $ 48,475
FOR INCOMES BETWEEN $ 48,475- $ 103,350
• State and local tax( SALT) deduction. Temporarily increases the limit on the deduction for the SALT cap to $ 40,000, with a 1 % increase each year through 2029, after which the $ 10,000 limit will return.
• Home mortgage interest deduction. Permanently reduces the mortgage debt limit for the home mortgage interest deduction to $ 750,000($ 375,000 for separate filers), but includes mortgage insurance premiums as deductible interest.
24 %
FOR INCOMES BETWEEN $ 103,350- $ 197,300
• Home equity debt deduction. Permanently eliminates the deduction for interest on home equity debt.
• Casualty loss deduction. Permanently limits the personal casualty deduction for losses resulting from federally declared disasters and certain state-declared disasters.
32 %
35 %
37 %
FOR INCOMES BETWEEN $ 197,300- $ 250,525
FOR INCOMES BETWEEN $ 250,525- $ 626,350
FOR INCOMES ABOVE $ 626,350
• Miscellaneous itemized deductions. Permanently eliminates miscellaneous itemized deductions except for unreimbursed educator expenses.
• Moving expense deduction. Permanently eliminates the moving expense deduction( with an exception for members of the military and their families in certain circumstances).
• Section 529 expenses. Expands the allowable expenses that can be paid with tax-free Section 529 plan distributions.
• Alternative minimum tax( AMT). Makes permanent the TCJA’ s increased individual AMT exemption amounts.
• Gift and estate tax exemption. Permanently increases the federal gift and estate tax exemption amount to $ 15 million for individuals and $ 30 million for married couples beginning in 2026, with annual inflation adjustments going forward.
04 | VIEWPOINTS: ISSUE 2 2025