Why Your Take-Home Pay Could Increase in 2025
Starting the new year with similar wages to the previous year could actually result in a higher take-home pay. Depending on your withholdings, your compensation after taxes and benefit deductions may see a bump, according to financial experts.
“Even if your salary remains the same as last year, due to an increase in tax brackets, you might end up paying less in taxes for 2025 compared to 2024,” explained a tax advisor.
The standard deduction has also increased for 2025, with married couples filing jointly now eligible for $30,000, up from $29,200 in 2024. Single filers can claim $15,000 in 2025, compared to $14,600 the previous year.
‘It Ends Up Nearly Balancing Out’
Despite these changes, many individuals may not feel the impact of the pay increase as prices for daily expenses continue to rise. In fact, according to a financial expert, it “ends up nearly balancing out” for most people.
In light of these adjustments, it is crucial to keep a close eye on your state and federal income tax withholdings throughout the year, especially during significant life or income changes. Incorrect withholding can result in either a tax refund or taxes owed at the end of the year.