Every year, the Internal Revenue Service (IRS) updates many things to account for rising prices, inflation, and the cost of living. However, not all items have been adjusted.
While you may have already noticed the significant changes that will take effect in the 2025 tax year, you may be relieved to learn what remains unchanged.
Keep in mind that, by statute, specific items that were previously inflation-indexed are no longer adjusted. In fact, three important items have not changed.
IRS items that will not change in the 2025 tax year
First and foremost, itemized deductions will remain the same. Personal exemptions will also remain unchanged for the tax year 2025. The third thing that will remain unchanged is lifetime learning credits.
So, let’s go through them and see what the current levels are.
- Itemized deductions: Once more, “there is no limitation on itemized deductions” as in tax year 2024. Bear in mind that the limitation on itemized deductions was withdrawn in 2027. Thanks to the Tax Cuts and Jobs Act from that year. So, it has remained unchanged since 2018.
IRS personal exemptions and Lifetime learning credits
- Personal exemptions have also remained unchanged: The 2025 tax year will also have the personal exemptions at 0, just like it was in the tax year 2024. This is another example of the elimination introduced by the 2017 Tax Cuts and Jobs Act.
- Lifetime learning credits: For your information, the Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $160,000 for joint returns and $80,000 for single filers. Therefore, the modified adjusted gross income amount used by American taxpayers to see the reduction in LLC is not adjusted for inflation for taxable years starting after December 31, 2020.
Anyway, it is also important to check the things that have changed if you have not done so yet.
Source: https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025
Read Also :- IRS Issues Nationwide Alert – Americans Urged to Prepare for the Worst and Have an Emergency Plan
