US Tax Planning 2025
Having entered into 2025, we will soon see the Republicans form a new US government with the shy and retiring Mr D Trump at the helm once more!
Highlights:
- Individual marginal tax rates increase to 39.6% for certain taxpayers
- Net investment income tax of 3.8% applies on certain investment income
- The capital gains tax rates have a new 20% top rate. There are now three tiers of tax rates on capital gains and qualified dividends: 0%, 15%, and 20%. (Capital gains could also be subject to the new net investment income tax of 3.8%, making the top rate on long-term gains effectively 23.8% combined.)
If you would like advice regarding the implications of these changes on your affairs or indeed assistance with your returns please contact us.
Married Taxpayers Filing Jointly
| If Taxable Income Is: | The Tax is: |
|---|---|
| $0 - $17,850 | 10% of the taxable income |
| $17,851 - $72,500 | $1,785 + 15% of the excess over $17,850 |
| $72,501 - $146,400 | $9,982.50 + 25% of the excess over $72,500 |
| $146,401 - $223,050 | $28,457.50 + 28% of the excess over $146,400 |
| $223,051 - $398,350 | $49,919.50 + 33% of the excess over $223,050 |
| $398,351 - $450,000 | $107,768.50 + 35% of the excess over $398,350 |
| $450,001+ | $125,846 + 39.6% of the excess over $450,000 |
Head of Household
| If Taxable Income Is: | The Tax is: |
|---|---|
| $0 - $12,750 | 10% of the taxable income |
| $12,751 - $48,600 | $1,275 + 15% of the excess over $12,750 |
| $48,601 - $125,450 | $6,652.50 + 25% of the excess over $48,600 |
| $125,451 - $203,150 | $25,865 + 28% of the excess over $125,450 |
| $203,151 - $398,350 | $47,621 + 33% of the excess over $203,150 |
| $398,351 - $425,000 | $112,037 + 35% of the excess over $398,350 |
| $425,001+ | $121,364.50 + 39.6% of the excess over $425,000 |
Individual Taxpayers
| If Taxable Income Is: | The Tax is: |
|---|---|
| $0 - $8,925 | 10% of the taxable income |
| $8,926 - $36,250 | $892.50 + 15% of the excess over $8,925 |
| $36,251 - $87,850 | $4,991.25 + 25% of the excess over $36,250 |
| $87,851 - $183,250 | $17,891.25 + 28% of the excess over $87,850 |
| $183,251 - $398,350 | $44,603.25 + 33% of the excess over $183,250 |
| $398,351 - $400,000 | $115,586.25 + 35% of the excess over $398,350 |
| $400,001+ | $116,163.75 + 39.6% of the excess over $400,000 |
Married Taxpayers Filing Separate
| If Taxable Income Is: | The Tax is: |
|---|---|
| $0 - $8,925 | 10% of the taxable income |
| $8,926 - $36,250 | $892.50 + 15% of the excess over $8,925 |
| $36,251 - $73,200 | $4,991.25 + 25% of the excess over $36,250 |
| $73,201 - $111,525 | $14,228.75 + 28% of the excess over $73,200 |
| $111,526 - $199,175 | $24,959.75 + 33% of the excess over $111,525 |
| $199,176 - $225,000 | $52,884.25 + 35% of the excess over $199,175 |
| $225,001+ | $62,923 + 39.6% of the excess over $225,000 |
