For your information only. We are not lawyers. We do not give legal advice. We do not make any guarantees for any income tax return.
STANDARD DEDUCTION INCREASED
The standard deduction has increased for 2025 for ALL filing statuses;
Married Filing Joint OR Qualifying Widow $31,500
Married Filing Separate OR Single $15,750 Head of Household $23,625
Senior Add-on 2025-2028
Taxpayers 65 or older may claim an extra $6,000 per person ($12,000 per couple)
KEY NOTE Phases out above $75,000 (Single)/ $150,000 (MFJ). Applies to both itemizers and non-itemizers.
Example: Married couple, both 65+, can claim $43,500 total deductions ($31,500 standard + $12,000 senior
add on).
NO TAX ON TIPS
A new deduction allows employees and self
employed individuals to deduct up to
$25,000 in qualified tips each
Qualified Tips Include:
• Voluntary cash or charged tips received directly from customers.
• Tips shared or pooled among employees.
(Third
party bonuses, such as delivery app incentives, do not qualify.)
Eligibility & Limits:
• Phases out above $150,000 (Single) / $300,000 (MFJ).
• Available to both itemizers and non
itemizers.
•
Applies only to IRS recognized tipped occupations (official list released by the IRS).
• SSTB self
employed individuals (under § 199A) are not eligible.
Example:
Maria, a restaurant server, reports $22,000 in tips for 2025.
She may deduct the entire amount, reducing her taxable income by $22,000.
NO TAX ON OVERTIME
Overview:
Employees may deduct the
“overtime portion of pay the extra half of time
and a half wages earned for hours worked over 40 per week as a new tax deduction.
Key Details:
• Applies to employees who receive overtime pay.
• Maximum deduction: $12,500 (Single) / $25,000 (
• Phases out above $150,000 (Single) / $300,000 (MFJ).
• Available to all taxpayers (no need to itemize).
• Married couples must file jointly to claim both deductions.
• Employers must report overtime amounts on Form W
2.
Example:
If your regular hourly rate is $15, your overtime rate is $22.50.
The 'extra half' ($7.50/hour) can be deducted as qualified overtime pay.
NO CAR TAX ON LOAN
Taxpayers can deduct interest paid on a qualified car loan for a personal
use
vehicle purchased after December 31, 2024:
• Maximum deduction: $10,000
• Phase
out: $100,000 (Single) | $200,000 (MFJ)
• Applies to both itemizers and non
itemizers.
• Vehicle must be for personal use (leases & business vehicles don’t qualify).
• Loan must be secured by the vehicle and originated after Dec 31, 2024.
• Vehicle must have final assembly in the United States.
Qualified Vehicles:
Cars, SUVs, trucks, vans, and motorcycles under 14,000
lbs that are new and
purchased for personal use.
Use the official NHTSA VIN Decoder to confirm U.S. assembly:
Example:
You finance a new 2025 SUV for personal use and pay $8,500 in loan interest during the year.
Trump Account
New tax- free savings plan under the On Big Beautiful Bill
For American children born after 12/31/2021 and before 01/01/2029
* $1,000 initial deposit from the government at account opening.
*Parent contributions: Up to $5,000 per year.
* Employer match: Up to $2,500 per year, tax free to employees.
TAX- FREE growth and withdrawls when used for:
~ Home purchase
~Education
~ Medical Expenses
* Modeled after Roth IRA rules--after-tax contributions, tax- free earnings.
* No penalty for qualified withdrawals after one year.
PURPOSE:
Helps families build long-term, tax free savings for major life goals.
Example:
A child born in 2026 could have over $300,000 by age 18 if maximum contributions are made or about $180,000 by age 28 with no additional contributions.
SALT Deduction Cap
Updated for Tax Year 2025:
Higher temporary cap for state and local tax deductions.
Cap increased:
$40,000 (MFJ) / $20,000 (Single or
Phase
down begins: begins:$500,000 (MFJ) / $250,0000 (
(reduces benefits for high
income taxpayers)
Effective period: 2025
2029 ( returns to $10,000 cap in 2030
Applies only to itemizers
combines state, local income, and property taxes.
Temporary relief: Higher cap intended to offset inflation and housing
cost pressures.
Planning tip: Homeowners and high
tax state residents may benefit from itemizing again.
Temporary increase through 2029; reverts to $10,000 limit in 2030 unless extended by
Congress.
Estimated 2026 Tax Refund Schedule Dates
If the IRS Accepts
Return By Estimated Then Direct Deposit
Jan. 26, 2026 Feb. 6, 2026
Feb. 2, 2026 Feb. 13, 2026
Feb. 9, 2026 Feb. 20, 2026
Feb. 16, 2026 Feb. 27, 2026
Feb. 23, 2026 Mar. 6, 2026
Mar. 2, 2026 Mar. 13, 2026
Mar. 9, 2026 Mar. 20, 2026
Mar. 16, 2026 Mar. 27, 2026
Mar. 23, 2026 Apr. 3, 2026
Mar. 30, 2026 Apr. 10, 2026
Apr. 6, 2026 Apr. 17, 2026
Apr. 15, 2026 (Tax Deadline) Apr. 24, 2026
GIFT & ESTATE TAX EXEMPTION
INCREASE
2025 Exemption:
$13.99 million per person ($27.98 million
per couple).
Annual Gift Exclusion: Exclusion:$19,000 per recipient.
Current limits apply through December 31, 2025.
The Big Beautiful Bill makes the higher exemption permanent,
raising it to roughly $15 million per person (indexed for
inflation). IRS has not yet issued the official 2026 Revenue
Procedure.
High net worth taxpayers should still review gifting and estate
plans to use available exclusions efficiently.
💡Tip: Plan gifting strategies before 2026 changes take
effect.
SECTION 179 & BONUS DEPRECIATION ADJUSTMENTS
Section 179 Expensing Limit 2025 limit: limit:$1,290,000 ; phase out starts at $ Applies to tangible property and Qualified Improvement Property (QIP). Indexed for inflation beginning in 2026. Enables small businesses to fully deduct costs upfront rather than depreciating over time. ────────────────────────────── Bonus Depreciation (IRC § 168(k)) Applies to property placed in service during 2025 and beyond. Permanently increases Bonus Depreciation to 100% for qualified property acquired and placed in service after January 19, 2025 (Section 70301 of the Bill), including certain plants planted or Applies to both new and used property with a recovery period of 20 years or less. Enhances cash flow flexibility and supports continued investment for small businesses. 💡Tip: Businesses should consider timing equipment purchases to take advantage of the restored 100% expensing provision.
AMT Exemption Increase
Ensures high
income taxpayers pay at least a minimum level of tax while
protecting middle income taxpayers through higher indexed exemptions.
Filing Status
AMT Exemption (2025)
Married Filing Jointly
$137,000
Single
$88,100
Married Filing
Separately
$68,500
Tax Rates: 26% and 28%
Phase
Out Thresholds: $500,000 (Single) | $1,000,000 (Married Filing Jointly)
Exemption amounts increased ~5% from 2024 due to inflation indexing.
QBI deduction made permanent
The 20% Qualified Business Income (QBI) deduction for pass through entities
including sole proprietorships, partnerships, and S corporations has been made
permanent under the 2025 legislation.
Impact:
• Continues providing tax relief for small and mid sized businesses.
• Preserves favorable treatment for LLC owners and independent
• Eliminates the 2026 'sunset' previously set under TCJA.
Key Details:
• Applies to active and passive trade or business
• Wage and property limits remain
• Enhanced income thresholds apply starting in
Tip: Review your business income structure before 2026 threshold changes.
Energy & EV Credit Updates
Residential Energy Efficiency Credit (25C)
Credit remains available through 2032, but only applies to property placed in service by December 31,
2025 under current law.
Covers upgrades like windows, doors, insulation, HVAC, heat pumps, and water heaters.
No new claims after 2025 unless extended by Congress or IRS.
Clean Vehicle Credit (EV Credit)
Credit continues through 2032, but new vehicle purchase eligibility ends September 30,
2025.
Applies to both new EVs ($7,500) and used EVs ($4,000).
Dealer point
of sale rebate ends after 2025 unless renewed by Congress or IRS.
Both energy and EV credits are set to narrow or expire after 2025 unless extended by Congress. Taxpayers
TAX BRACKET INCREASE
For 2025, the tax brackets for individual income tax increased as follows:
32% for incomes between $191,951-$243,725 ($383,901-$487,450 for married couples filing jointly);
24% for incomes between $100,526-$191,950 ($201,051-$383,900) for married couples filing jointly);
22% for incomes between $47,151-$100,525 ($94,301-$201,050) for married couples filing jointly);
12% for incomes between $11,926-$47,150 ($23,851- $94,300) for married couples filing jointly).
10% for incomes of single individuals with incomes of $11,925 or less ($23,850 for married couples filing jointly).
