Overview
- The IRS began accepting returns on January 26 with an April 15 deadline, and the changes apply to income earned in 2025.
- Eligible service workers can deduct up to $25,000 in qualified tip income, and only the federally mandated premium portion of overtime is deductible, capped at $12,500 for single filers and $25,000 for joint filers with income limits and specific SSN and filing requirements.
- Taxpayers 65 and older may claim an extra $6,000 deduction per person, phasing out above $75,000 in MAGI for single filers and $150,000 for joint filers, and ending at $175,000 and $250,000 respectively.
- The Child Tax Credit rises to $2,200 per qualifying child for 2025 with inflation indexing, and a work‑eligible Social Security number is required to claim it.
- Other shifts include a higher standard deduction ($15,750 single; $31,500 joint), a SALT cap increase to $40,000 for itemizers, and a new deduction of up to $10,000 in interest on qualifying 2025 new car loans assembled in the U.S., available through 2028.