11/23/2025
Welcome to tax season for tax year 2025.
There are many changes this year due to the Big Beautiful Bill.
1.) The standard deduction has increased and is made permanent at higher levels compared to pre-2025 law.
Single filers and Married Filing Separately: $15,750.
Married Filing Jointly: $31,500.
Head of Household: $23,625.
2.) Tax Brackets: The seven federal income tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) remain in place but have been adjusted for inflation.
3.)Child Tax Credit: The maximum credit is now up to $2,200 per qualifying child, with a refundable portion of up to $1,700, and is indexed to inflation.
4.)Personal Exemptions: The personal exemption amount remains at $0, as the elimination of personal exemptions was made permanent by the OBBBA.
5.) No Tax on Overtime: A new deduction allows individuals to deduct a portion of their qualified overtime compensation (the "half" portion of "time-and-a-half" pay), up to $12,500 for single filers or $25,000 for joint filers. So just so its clear, over time up to 12,500 for single filers will be credited back. Not all of your over time.
6.) No Tax on Tips: Taxpayers may deduct up to $25,000 in tip income.
7.)Additional Senior Deduction: Taxpayers aged 65 and older may claim an additional $6,000 deduction, subject to phaseouts.
8.)Auto Loan Interest Deduction: Taxpayers may deduct up to $10,000 annually in interest on new, U.S.-assembled personal-use vehicle loans.
8.)State and Local Taxes (SALT) Cap: The itemized deduction cap for state and local taxes increases from $10,000 to $40,000 for the 2025 tax year, with a phaseout for high-income earners. This means your property tax is not capped now.
9.)Alternative Minimum Tax (AMT): The AMT exemption amounts have been made permanent and adjusted for inflation.
10.)Estate Tax Exemption: For decedents who die in 2026, the basic exclusion amount is $15,000,000, up from $13.99 million for 2025.
11.)Starting in 2026, non-itemizers can deduct cash donations to charity—up to $1,000 for single filers or $2,000 for married couples filing jointly.
As you can see, many new laws. Reach out to A to Z Tax for all of your tax needs. We work remotely for many individuals and companies nationwide, and willing to work for you!
Our fees are just about 1/2 of the average accounting services nationwide!!
