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What's New for 2025

In 2024, the standard deduction is $15,750 for single filers and married persons filing separately, $23,625 for a head of household, and $31,500 for a married couple filing jointly and surviving spouses.
Taxpayers who are age 65 or older or blind are eligible for additional deductions. The amounts are $2,000 for Single and Head of household filers, $1,600 for married individuals (filing either jointly or separately), and 1,600 for qualifying surviving spouses.
New Enhanced Senior Deduction:Individuals age 65 and older can claim an additional deduction of up to $6,000 per eligible person (or $12,000 for a qualifying married couple). This deduction has Modified Adjusted Gross Income (MAGI) phase-out limits, beginning at $75,000 for single filers and $150,000 for married couples filing jointly.
The OBBBA raised the maximum amount for the child tax credit to $2,200 for each qualifying child, up from $2,000 previously scheduled for this year. It also requires, among other things, that parents and their qualifying children have Social Security numbers.
100% bonus depreciation, has been restored and made permanent for qualified property acquired and placed in service after January 19, 2025. A transitional election permits taxpayers to apply 40% or 60% bonus depreciation on certain property placed in service after January 19, 2025 For qualified property placed in service between January 1, 2025, and January 19, 2025, the bonus percentage is 40%.
The annual gift tax exclusion is $19,000 for 2025.
The marginal tax rates for 2025 are:
- 10% for incomes of single individuals or married individuals with incomes of $11,925 or less,$23,850 for married couples filing jointly, and $17,000 or less for head of househouse filers.
- 12% for incomes $11,926 to $48,475 for single and married filing separately,$23,851 to $96,950 for married couples filing jointly, and $17,001 to $64,850 for head of household filers.
- 22% for incomes $48,476 to $103,350 for single and married filing separately, $96,951 to $206,700 for married couples filing jointly, and $64,851 to $103,350 for head of household filers.
- 24% for incomes $103,351 to $197,300 for single and married filing separately, $206,701 to $394,600 for married couples filing jointly, and $103,351 to $197,300 for head of household filers.
- 32% for incomes$197,301 to $250,525 for single and married filing separately, $394,601 to $501,050 for married couples filing jointly, and $197,301 to $250,500, and $197,301 to $250,500 for head of household
- 35% for incomes $250,526 to $626,350 single and married filing separately, $501,051 to $751,600 for married couples filing jointly, and $250,501 to $626,350 for heads of household.
- 37% for individual single taxpayers and married individuals with incomes greater than $626,350,$751,600 for married couples filing jointly, and $626,350 for head of household..

Although the rules for electric vehicle tax credits were not changed for 2025, the OBBB act eliminated the credit as of September 30, 2025.
The $10,000 cap on state and local tax deductions has increased to $40,000 ($20,000 if married filing separately). The deduction begins phasing back to $10,000 for income over $500,000 and is back to $10,000 for incomes $600,000 and over.
If you bought a new vehicle (eg, a car, motorcycle or van) for personal use this year and you took out a loan to finance the purchase, you may be allowed to deduct at least some of the interest. But only if the final leg of production for your vehicle was done in the United States. But you won’t be allowed to deduct more than $10,000 a year – an amount that is reduced if your MAGI is over $100,000 ($200,000 if married filing jointly). Once your MAGI exceeds $149,000 ($249,000 for joint filers) the deduction is disallowed.
Taxpayers may deduct up to $25,000 of "qualified tip income". It applies only in industries where tipping is considered customary. The Treasury department will supply a list of these. The tips, however, are still subject to F.I.C.A. taxes and the eligible amount is reduced for taxpayers whose MAGI is above $150,000 ($300,000 if married filing jointly)
There is a new deduction for overtime pay, however, the deduction only applies to the additional amount over regular pay when working overtime (e.g. if you are paid time and a half for overtime, only the half part qualifies). The entire amount is still subject to F.I.C.A. taxes. Lastly, you may only deduct up to $12,500 of eligible overtime compensation ($25,000 for joint filers). And you can only take the full deduction if your MAGI is less than $150,000 ($300,000 for joint filers). You will be allowed to deduct a smaller amount if your MAGI is higher, but the deduction will be disallowed if your income is exceeds $275,000 ($550,000 for married couples).