07/22/2025
A few of the new 2025 tax laws, courtesy of Fidelity:
Higher Standard Deduction (Plus a Bonus for Seniors)
The standard deduction remains high:
$15,750 for individuals
$31,500 for married couples filing jointly1
New senior deduction:
People 65 and older may be eligible for an additional deduction of up to $6,000 (or $12,000 for couples).
This bonus phases out at incomes above $75,000 (single) or $150,000 (joint), and it’s available through 2028.2
Expanded Child Tax Credit
The credit rises from $2,000 to $2,200 per child
It is now indexed for inflation, meaning it may increase gradually over time3
Even if you no longer claim children, your children or grandchildren might benefit from this change.
Temporary Deductions for Tips, Overtime & Auto Loans (2025–2028)
Up to $25,000 in deductions for tips and overtime income
Up to $10,000 in deductible interest on auto loans, but only for U.S.-assembled vehicles4
Higher Cap on State & Local Tax Deductions (SALT)
The deduction cap for state and local taxes increases to $40,000
Available for households with less than $500,000 in annual income
The expanded cap is temporary and expires in 5 years5
“Trump Accounts” for Newborns (2025–2028)
Parents of newborns will receive a $1,000 deposit in a new tax-deferred account
Additional contributions of up to $5,000 per year are allowed
Funds can grow tax-deferred and be used for education, home buying, or life milestones6
In Summary:
This bill introduces several meaningful tax updates, especially for:
Retirees and seniors
Working individuals earning tips or overtime
Families supporting children or grandchildren
Most of these changes expire after 2028, so now might be the time to plan ahead.
This does not cover all the changes but is an initial brief summary. As always, some deductions/credits are based upon income and if your personal income exceeds the limit, no tax deduction benefit.
