Overview
- Early IRS data show the average refund running about 14% higher than a year ago.
- Filers must use the new Schedule 1‑A to claim the tips, overtime, seniors’ and auto‑loan‑interest deductions.
- The tips break allows up to $25,000 in “qualified tips” for workers in IRS‑listed occupations, limited to voluntary cash‑equivalent tips and still subject to payroll taxes.
- Income limits apply: the full tips deduction is available up to MAGI $150,000 ($300,000 joint) with reductions above that and full phaseouts near $400,000 single/$550,000 joint.
- Other targeted breaks include up to $12,500 for overtime and up to $10,000 in interest on 2025 loans for U.S.‑assembled new cars, which requires the vehicle’s VIN and a loan in the buyer’s name.