What's New in 2025?
Standard Deduction Amounts
For 2025, the standard deduction amount has been increased for all filers. The amounts are:
- For single filers and married individuals filing separately: $16,100
- For married couples filing jointly: $32,200
- For heads of household: $24,150
**Individuals 65 and older may claim an additional $6,000 deduction, $12,000 if filing married.
Earned Income Tax Credit
Earned Income Tax Credit maximum amounts stay the same for tax year 2025 as the following:
- No qualifying children: $649
- 1 qualifying child: $4,328
- 2 qualifying children: $7,152
- 3 or more qualifying children: $8,046
*Income limitations apply.
Child Tax Credit
The maximum child tax credit for tax year 2025 has increased by $200 to up to $2,200.
No Tax on Tips
Effective 2025 through 2028, employees and self-employed individuals may deduct up to $25,000 in tips.
- Must be qualified tips they received in occupations the IRS identified as “customarily and regularly receiving tips”
- Must be reported on the W-2, Form 1099, another statement furnished to the individual, or form 4137.
- “Qualified tips” include voluntary cash or charged tips received from customers, including shared tips.
- Maximum annual deduction is $25,000.
- Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
No Tax on Over Time
Effective 2025 through 2028, taxpayers may deduct up to $12,500 in overtime pay!
- Must be the portion of qualified overtime pay that exceeds their regular rate of pay (for example, the “half” portion of “time-and-half”).
- Overtime must be reported on the W-2, 1099, another statement furnished to the individual, or directly by the individual.
- Maximum annual deduction is $12,500 ($25,000 for join filers.)
- Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
1099-K Payment Card and Third Party Network Transactions
Payment apps and online marketplaces such as Venmo, CashApp, or Zelle will be reporting transactions for goods or services where the total payments received were more than $5,000 in 2024 through form 1099-k.
In 2025 the threshold will be $2,500; and more than $600 in calendar year 2026 and thereafter.
You Can Now Deduct Car Loan Interest
- Effective 2025 through 2028 taxpayers may deduct up to $10,000 in interest paid on a loan used to purchase a car starting Jan. 1, 2025.
- Must be for personal use ONLY.
- Lease payments do not qualify.
- Maximum annual deduction is $10,000.
- Phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).
Interest must be paid on a loan that:
- Originated after December 31, 2024.
- Was used to purchase a vehicle originally used by the taxpayer.
- Was secured by a lien on the vehicle.
- Available to both itemizing and non-itemizing taxpayers.
- You must include the VIN on your return for any year you claim the deduction.
- Lenders will be providing a form with total amount of interest received during the taxable year.
If qualifying a vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.
What Counts as a Qualified Vehicle
A qualified vehicle is a car, minivan, van, SUC, pickup truck or motorcycle that:
- Has a gross vehicle weight rating of less than 14,000 pounds.
- Underwent final assembly in the United States.
Trump Accounts for Children
The federal government will make a one-time $1,000 contribution for American children born between January 1, 2025 and December 31, 2028.
- Contributions can be made by individuals and employers up to $5,000 per year.
- Employers can contribute up to $2,500 per year toward an employee’s or dependent’s Trump Account without it counting as taxable income for the employee.
- Funds must be invested in certain mutual funds or exchange-traded funds that track a U.S. stock index such as the S&P 500.
- Money cannot be withdrawn before the year the child turns 18, after that the account is treated like a traditional IRA with similar tax rules.
- Launching July 5, 2026.
Adoption Credit Limits for Tax year 2026
- Maximum adoption credit $17,670, with up to $5,120 of this credit may be refundable.
Health Savings Account Expansion
- Starting January 1, 2026, bronze and catastrophic health insurance plans are treated as HSA-compatible.
- This applies whether the plans are bought through an insurance exchange or not.
- This change makes more people eligible to contribute to an HSA, including individuals who previously could not because their plan did not meet the strict HDHP definition.
Home and Residential Energy Credits
The end of the following home and residential energy credits comes to an end:
- Energy Efficient Home Improvement Credit: Not allowed for any property placed in service after December 31, 2025.
- Residential Clean Energy Credit: Not allowed for any expenditures made after December 31, 2025.
Clean Vehicle Credit
The end of several clean vehicle credits comes to an end:
- New Clean Vehicle Credit: Not allowed for any vehicle acquired after September 30, 2025.
- Used Clean Vehicle Credit: Not allowed for any vehicle acquired after September 30, 2025.
- Qualified Commercial Clean Vehicle Credit: The credit will not be allowed for any vehicle acquired after September 30, 2025.
Standard Deduction Amounts
For 2025, the standard deduction amounts for all filers have been raised and will be as follows:
- For single filers and married individuals filing separately: $16,100
- For married couples filing jointly: $32,200
- For heads of household: $24, 150
**Individuals age 65 and older may claim an additional $6,000 deduction, $12,000 if filing married.
Earned Income Tax Credit
Earned Income Tax Credit maximum stay the same for tax year 2025 as the following:
- No qualifying children: $649
- 1 qualifying child:: $4,328
- 2 qualifying children: $7,152
- 3 or more qualifying children: $8,046
*Income limitations apply
Child Tax Credit
The maximum child tax credit for 2025 has increased by $200 up to $2,200.
No Tax on Tips
Effective 2025 through 2028, employees and self-employed individuals may deduct up to $25,000 in tips.
- Must be qualified tips they received in occupations the IRS identified as “customarily and regularly receiving tips”
- Must be reported on the W-2, Form 1099, another statement furnished to the individual, or form 4137.
- “Qualified tips” include voluntary cash or charged tips received from customers, including shared tips.
- Maximum annual deduction is $25,000.
- Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
No Tax on Over Time
Effective 2025 through 2028, taxpayers may deduct up to $12,500 in overtime pay!
- Must be the portion of qualified overtime pay that exceeds their regular rate of pay (for example, the “half” portion of “time-and-half”).
- Overtime must be reported on the W-2, 1099, another statement furnished to the individual, or directly by the individual.
- Maximum annual deduction is $12,500 ($25,000 for join filers.)
- Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
1099-K Forms
Third party settlement organization (TPSO) are not required to file a Form 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200.
For more details check out the 1099-K factsheet below.
You Can Now Deduct Car Loan Interest
- Effective 2025 through 2028 taxpayers may deduct up to $10,000 in interest paid on a loan used to purchase a car starting Jan. 1, 2025.
- Must be for personal use ONLY.
- Lease payments do not qualify.
- Maximum annual deduction is $10,000.
- Phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).
Interest must be paid on a loan that:
- Originated after December 31, 2024.
- Was used to purchase a vehicle originally used by the taxpayer.
- Was secured by a lien on the vehicle.
- Available to both itemizing and non-itemizing taxpayers.
- You must include the VIN on your return for any year you claim the deduction.
- Lenders will be providing a form with total amount of interest received during the taxable year.
If qualifying a vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.
What Counts as a Qualified Vehicle
A qualified vehicle is a car, minivan, van, SUC, pickup truck or motorcycle that:
- Has a gross vehicle weight rating of less than 14,000 pounds.
- Underwent final assembly in the United States.
Trump Accounts for Children
The federal government will make a one-time $1,000 contribution for American children born between January 1, 2025 and December 31, 2028.
- Contributions can be made by individuals and employers up to $5,000 per year.
- Employers can contribute up to $2,500 per year toward an employee’s or dependent’s Trump Account without it counting as taxable income for the employee.
- Funds must be invested in certain mutual funds or exchange-traded funds that track a U.S. stock index such as the S&P 500.
- Money cannot be withdrawn before the year the child turns 18, after that the account is treated like a traditional IRA with similar tax rules.
- Launching July 5, 2026.
Adoption Credit Limits for Tax year 2026
- Maximum adoption credit $17,670, with up to $5,120 of this credit may be refundable.
Health Savings Account Expansion
- Starting January 1, 2026, bronze and catastrophic health insurance plans are treated as HSA-compatible.
- This applies whether the plans are bought through an insurance exchange or not.
- This change makes more people eligible to contribute to an HSA, including individuals who previously could not because their plan did not meet the strict HDHP definition.
Home and Residential Energy Credits
The end of the following home and residential energy credits comes to an end:
- Energy Efficient Home Improvement Credit: Not allowed for any property placed in service after December 31, 2025.
- Residential Clean Energy Credit: Not allowed for any expenditures made after December 31, 2025.
Clean Vehicle Credit
The end of several clean vehicle credits comes to an end:
- New Clean Vehicle Credit: Not allowed for any vehicle acquired after September 30, 2025.
- Used Clean Vehicle Credit: Not allowed for any vehicle acquired after September 30, 2025.
- Qualified Commercial Clean Vehicle Credit: The credit will not be allowed for any vehicle acquired after September 30, 2025.
Health Savings Account Expansion
- Starting January 1, 2026, bronze and catastrophic health insurance plans are treated as HSA-compatible.
- This applies whether the plans are bought through an insurance exchange or not.
- This change makes more people eligible to contribute to an HSA, including individuals who previously could not because their plan did not meet the strict HDHP definition.
Home and Residential Energy Credits
The end of the following home and residential energy credits comes to an end:
- Energy Efficient Home Improvement Credit: Not allowed for any property placed in service after December 31, 2025.
- Residential Clean Energy Credit: Not allowed for any expenditures made after December 31, 2025.
Refer a Friend!
When you refer a family member or friend to our team, you will receive a $50 referral incentive. Make sure your referral tells us of your name so that we can say a special thank you with your incentive.