For 2025, the U.S. exit tax (expatriation tax) exclusion amount is $890,000. This means that for individuals renouncing U.S. citizenship or giving up a green card, up to $890,000 of gains from the "deemed sale" of worldwide assets on the day before expatriation is excluded from taxable income.
The amount that would otherwise be includible in gross income by reason of the deemed sale rule is reduced (but not to below zero) by $600,000, which amount is to be adjusted for inflation for calendar years after 2008 (the “exclusion amount”). For calendar year 2025, the exclusion amount is $890,000.
Starting January 1, 2025, the One Big Beautiful Bill Act (OBBBA) introduces a federal income tax exemption on designated amount of qualifying overtime pay. The big news is you can deduct up to $12,500 in overtime pay if for most filers (and up to $25,000 if you're Married Filing Jointly).
In 2025, the federal estate tax exemption is a historically high $13.99 million per person (or $27.98 million for married couples) due to the Tax Cuts and Jobs Act (TCJA), but this is set to revert to lower pre-2017 levels (around $7 million) at the end of 2025, unless new legislation intervenes, creating urgency for estate planning before the sunset. A new law, the "One Big Beautiful Bill Act (OBBB)", passed in 2025, however, permanently increases the exemption to $15 million per person (indexed for inflation) starting January 1, 2026, eliminating the planned sunset and providing a stable, higher exemption for the future.
Starting Jan. 1, 2026, the basic exemption amount increases to $15 million per person. Any remaining unused exclusion amount upon a married person's death is portable and transferred to the surviving spouse, effectively sheltering $30 million from federal estate and gift tax for a married couple.
For the 2025 tax year, the basic federal standard deduction (the "basic exemption") increased significantly due to inflation and a special boost from the new One, Big, Beautiful Bill (OBBB), now being $15,750 for Single filers, $31,500 for Married Filing Jointly, and $23,625 for Head of Household, with further additional amounts for seniors and the blind. These figures reflect an approximate 7.9% increase from 2024, with the OBBB law extending the doubled standard deduction.
Standard Deduction.
For single taxpayers and married individuals filing separately, the standard deduction for 2025 is $15,750, and for heads of households, the standard deduction is $23,625.)
For the 2025 tax year, seniors (age 65+) get a new $6,000 bonus deduction (or $12,000 for couples) under the "One Big Beautiful Bill," stacked on top of the existing senior standard deduction, phasing out for incomes over $75k (single) or $150k (joint), available through 2028, and requires an SSN and joint filing if married.
For 2026, the federal estate and gift tax exemption is set to increase to $15 million per individual, up from $13.99 million in 2025, thanks to the One Big Beautiful Bill Act (OBBBA) signed in 2025, making this higher amount permanent and indexed for inflation. This means a married couple could potentially shield up to $30 million from federal estate and gift taxes, with the top tax rate remaining at 40% for amounts exceeding the exemption.
Major U.S. tax changes for 2025, largely driven by the "One Big Beautiful Bill" (OBBBA) Act, include permanent increases to the standard deduction, expanded Child Tax Credit, a higher SALT deduction cap, new deductions for seniors, tips, and auto loan interest, plus a permanent 20% pass-through deduction, while phasing out clean energy credits. These changes, effective for the 2025 tax year (filing in 2026), make many prior temporary provisions permanent and introduce new tax breaks for individuals and businesses.
US Exit Tax FAQs
The exit tax applies to U.S. citizens and long-term green card holders with a net worth exceeding $2 million or an average annual tax liability over $171,000 during the last five years.
The new senior tax deduction of up to $6,000 for single filers and $12,000 for joint filers, was created to help cover taxes on Social Security benefits. Taking the new senior deduction helps to reduce your taxable income, which can mean less tax or potentially an even bigger tax refund when you file your return.
What is the new deduction for seniors? The senior deduction is an exemption for filers 65 and older introduced in the One Big Beautiful Bill Act. It allows seniors to claim an additional $6,000, whether they itemize or take the standard deduction.
The income tax slab rates under the new tax regime for FY 2025–26 are as follows: income up to ₹4 lakh is tax-free; ₹4 lakh to ₹8 lakh is taxed at 5%; ₹8 lakh to ₹12 lakh at 10%; ₹12 lakh to ₹16 lakh at 15%; ₹16 lakh to ₹20 lakh at 20%; ₹20 lakh to ₹24 lakh at 25%; and income above ₹24 lakh is taxed at 30%.
The maximum CPP payment in 2025 is $1,433 per month or $17,197 per year. This includes the maximum base CPP payment of $1,387 per month plus a maximum enhanced CPP payment of $46 per month.
You can typically inherit a large amount without federal taxes because the tax applies to the deceased's estate, not the recipient, and the exemption is very high: $13.99 million in 2025 and $15 million in 2026 per person, meaning most inheritances fall below this threshold. The key is that the estate's total value must exceed these limits for any tax to be owed by the estate. Inheritances themselves (cash, property) are generally not income, but earnings on them (like interest/dividends) or pre-tax retirement funds (like IRAs) are taxable.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
You can typically inherit a very large amount from your parents before hitting federal estate tax thresholds, which are around $15 million per individual in 2026, meaning most heirs receive tax-free inheritances because estates rarely exceed this limit; however, some states have their own estate or inheritance taxes, and income from inherited assets (like IRAs or rental income) is usually taxable, according to this U.S. Bank article, this Fidelity article, this Domain Money article, and this Tax Foundation article.