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PrintChanges to federal taxes are still a hot topic. The One Big Beautiful Bill Act (OBBBA; Pub. L. 119-21) makes permanent many provisions from the Tax Cuts and Jobs Act (TCJA) that were to sunset on December 31, 2025.
Tax Rates and Brackets
The OBBBA makes permanent seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Here are the 2025 rates.
2025 Rates and Taxable Income
| 2025 Tax Rate | Single | Married, Filing Jointly | Head of Household |
| 10% | $0-$11,925 | $0 - $23,850 | $0 - $17,000 |
| 12% | $11,926 - $48,475 | $23,851 - $96,950 | $17,001 - $64,850 |
| 22% | $48,476 - $103,350 | $96,951 - $206,700 | $64,851 - $103,350 |
| 24% | $103,351 - $197,300 | $206,701 - $394,600 | $103,351 - $197,300 |
| 32% | $197,301 - $250,525 | $394,601 - $501,050 | $197,301 - $250,500 |
| 35% | $250,526 - $626,350 | $501,051 - $751,600 | $250,501 - $626,350 |
| 37% | $626,351+ | $751,601+ | $626,351+ |
Rates for Withholding on Supplemental Wages
As the tax rates are permanent, the two-tiered system for withholding income tax from supplemental wages at a flat rate should remain at TCJA levels as well. There is a two-tiered system for withholding income tax from supplemental wages at a flat rate:
- Optional flat rate: 22%. The optional flat tax rate on supplemental wages of up to $1 million was reduced from 25% to 22% by the TCJA. The OBBBA retains the 22% optional flat rate (no other percentage allowed).
- Mandatory flat rate: 37%. The OBBBA retains the 37% mandatory flat rate for withholding on supplemental wages of more than $1 million, which was lowered from 39.6% by the TCJA.
Backup Withholding Rate
The OBBBA retains the 24% backup withholding rate, which was lowered from 28% by the TCJA.
Personal Exemption Elimination and Income Tax Withholding
The OBBBA makes permanent the elimination of the personal exemption claimed by taxpayers for themselves and their spouse and dependents, which was temporarily suspended by the TCJA. For 2025, the OBBBA increases the standard deduction to $31,500 (from $30,000) for married individuals filing jointly, $23,625 (from $22,500) for head-of-household filers, and $15,750 (from $15,000) for all others. The standard deduction will continue to be adjusted for inflation annually.
Federal Tax Levies
The dollar amount used to calculate the amount exempt from levy is determined under IRC §6334(d)(4)(B), which the OBBBA did not affect. For 2025, the IRC §6334(d)(4)(B) amount is $5,100. Each year, the IRS publishes the updated levy tables in Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income. The 2025 tables were released on December 4, 2024.
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