05/03/2026
📢 Major IRS Update for Tax Year 2025!
The Internal Revenue Service has released a new Schedule 1-A and updated Form 1040 instructions under the One, Big, Beautiful Bill — bringing important tax relief for millions of taxpayers.
✅ No Tax on Tips
✔ Deduction up to $25,000 (phased out after $150,000 MAGI / $300,000 MFJ)
✔ Available even with the standard deduction
✅ No Tax on Overtime
✔ Deduction up to $12,500 ($25,000 for married filing jointly)
✔ Applies to overtime paid under the Fair Labor Standards Act
✅ No Tax on Car Loan Interest
✔ Deduction allowed for qualified passenger vehicle loan interest
✔ Can be claimed whether itemizing or not
✅ Enhanced Deduction for Seniors
✔ $6,000 per person ($12,000 for eligible married couples)
✔ For taxpayers born before Jan 2, 1961
✔ Phased out after $75,000 MAGI ($150,000 MFJ)
📌 These deductions will be claimed using the new Schedule 1-A, attached to Form 1040.
💡 The IRS strongly recommends e-filing and direct deposit to reduce errors and speed up refunds.
This is a big step toward targeted tax relief for workers, families, and seniors.
Tax professionals should start preparing clients early for these new rules.
