{"id":2777,"date":"2026-01-10T05:00:45","date_gmt":"2026-01-10T09:00:45","guid":{"rendered":"https:\/\/www.saudercpa.com\/blog\/?p=2777"},"modified":"2026-01-09T12:18:38","modified_gmt":"2026-01-09T16:18:38","slug":"tax-highlights-to-help-you-prepare-for-2025-tax-filing","status":"publish","type":"post","link":"https:\/\/www.saudercpa.com\/blog\/2026\/01\/10\/tax-highlights-to-help-you-prepare-for-2025-tax-filing\/","title":{"rendered":"Tax\u00a0Highlights\u00a0to\u00a0Help\u00a0You Prepare\u00a0for\u00a02025\u00a0Tax\u00a0Filing\u00a0"},"content":{"rendered":"<p><em>Preface: \u201cBy failing to prepare, you are preparing to fail.\u201d <strong>\u2014 Benjamin Franklin<\/strong><\/em><\/p>\n<p><strong>Tax Highlights to Help You Prepare for 2025 Tax Filing\u00a0<\/strong><\/p>\n<p><span data-contrast=\"auto\">The\u00a0<\/span><span data-contrast=\"auto\">One Big Beautiful Bill Act\u00a0of 2025<\/span><span data-contrast=\"auto\"> (OBBBA) ushers in a new tax environment whose full effects will take several years to unfold and will likely require further clarification. Please join us now as we review some of the updated numbers for 2025 and some of the structural changes introduced by this sweeping legislation.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720,&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720,&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Standard Deduction<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0standard\u00a0deduction\u00a0has\u00a0increased\u00a0for\u00a02025\u00a0as\u00a0follows:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><span data-contrast=\"none\">Joint\u00a0filers\u00a0&#8211;\u00a0$31,500<\/span><span data-ccp-props=\"{&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:1493,&quot;335559738&quot;:13,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/li>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;134224900&quot;:false,&quot;335551500&quot;:1710618,&quot;335551671&quot;:0,&quot;335552541&quot;:1,&quot;335559685&quot;:913,&quot;335559991&quot;:361,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Individual\u00a0taxpayers\u00a0&#8211;\u00a0$15,750\u00a0<\/span><\/li>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;134224900&quot;:false,&quot;335551500&quot;:1710618,&quot;335551671&quot;:0,&quot;335552541&quot;:1,&quot;335559685&quot;:913,&quot;335559991&quot;:361,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Heads\u00a0of\u00a0household\u00a0&#8211;\u00a0$23,625<\/span><span data-ccp-props=\"{&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:1493,&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">An\u00a0additional\u00a0amount of $1,600 is added to the standard deduction of a taxpayer\u00a0who\u00a0is\u00a0age\u00a065 or older or who is blind.\u00a0The\u00a0additional\u00a0amount is\u00a0$2,000 if\u00a0the taxpayer is\u00a0unmarried and not a surviving spouse.\u00a0If you\u00a0are age\u00a065 or older and blind, you get to take the\u00a0additional\u00a0amount twice.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720,&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Income Tax brackets<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:0,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><span data-contrast=\"none\">Income tax brackets for\u00a02025\u00a0are as follows:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<table data-tablestyle=\"MsoTableGrid\" data-tablelook=\"1184\" aria-rowcount=\"8\">\n<tbody>\n<tr aria-rowindex=\"1\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">Single<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">Married Filing Jointly<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">Rate<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"2\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$0 &#8211;\u00a0$11,925<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$0 &#8211;\u00a0$23,850<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">10%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"3\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$11,926\u00a0&#8211;\u00a0$48,475<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$23,851\u00a0&#8211;\u00a0$96,950<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">12%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"4\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$48,476\u00a0&#8211;\u00a0$103,350<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$96,951\u00a0&#8211;\u00a0$206,700<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">22%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"5\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$103,351\u00a0&#8211;\u00a0$197,300<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$206,701\u00a0&#8211;\u00a0$394,600<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">24%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"6\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$197,301\u00a0&#8211;\u00a0$250,525<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$394,601\u00a0&#8211;\u00a0$501,050<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">32%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"7\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$250,526\u00a0&#8211;\u00a0$626,350<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$501,051\u00a0&#8211;\u00a0$751,600<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">35%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"8\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$626,351\u00a0and up<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$751,601\u00a0and up<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">37%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span data-contrast=\"none\">Note that these brackets apply to taxable income after all deductions have been taken. The rates apply in a graduated manner, up to each threshold at the applicable rate, and from that threshold at the next applicable rate, etc.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Changes to Itemized Deductions<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p>SALT<\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"auto\">The biggest single change to itemized deductions is that the cap on the <\/span><b><span data-contrast=\"auto\">state and local tax (SALT)\u00a0<\/span><\/b><span data-contrast=\"auto\">deduction has been increased to $40,000. This increase will expire after 2028, and absent additional legislation, the cap will then revert to $10,000.<\/span><span data-ccp-props=\"{&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"auto\">Another new wrinkle in the SALT deduction is that the increased cap has a phaseout threshold for high\u00a0earners. For both single filers and married filing jointly, the phaseout begins at\u00a0modified\u00a0AGI of $500,000. The cap phases down from $40,000. At\u00a0modified\u00a0AGI of $600,000 or more,\u00a0the cap\u00a0is again $10,000.<\/span><span data-ccp-props=\"{&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">Mortgage Interest\u00a0<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"auto\">OBBBA reintroduces the deductibility of\u00a0<\/span><b><span data-contrast=\"auto\">mortgage insurance premiums<\/span><\/b><span data-contrast=\"auto\">, which had been disallowed in recent years. The indebtedness limit of $750,000 for\u00a0mortgage interest<\/span><b><span data-contrast=\"auto\">\u00a0<\/span><\/b><span data-contrast=\"auto\">deductions\u00a0remains\u00a0unchanged.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:76,&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">OBBBA makes no changes to deductibility of\u00a0<\/span><b><span data-contrast=\"auto\">medical expenses<\/span><\/b><span data-contrast=\"auto\">. These are still limited to the amount that exceeds\u00a07.5% of AGI.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720,&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The itemized deduction for\u00a0<\/span><b><span data-contrast=\"auto\">personal casualty loss<\/span><\/b><span data-contrast=\"auto\">\u00a0has been broadened to include casualty loss due to state as well as\u00a0federally-declared\u00a0disasters.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720,&quot;335559738&quot;:10,&quot;335559739&quot;:160,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Other\u00a0<\/span><b><span data-contrast=\"auto\">miscellaneous<\/span><\/b><span data-contrast=\"auto\">\u00a0itemized deductions are now permanently eliminated.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720,&quot;335559738&quot;:10,&quot;469777462&quot;:[913],&quot;469777927&quot;:[0],&quot;469777928&quot;:[1]}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Changes Coming to\u00a0Charitable Contribution Deductions\u00a0in 2026<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:0,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Starting in 2026,\u00a0there\u00a0will be\u00a0a lower-bound or \u201cfloor\u201d on charitable deductions equal to 0.5% of AGI.\u00a0The\u00a0itemized\u00a0charitable\u00a0deduction\u00a0will be reduced by this amount.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Also starting in 2026,\u00a0a\u00a0new\u00a0non-itemized\u00a0charitable deduction\u00a0will be available as\u00a0a below-the-line deduction. Unlike the four\u00a0other\u00a0new below-the-line deductions introduced in the OBBBA, the charitable deduction\u00a0will be\u00a0permanent. It will not expire after 2028.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The non-itemized\u00a0deduction\u00a0will be\u00a0capped at $1,000 for single\u00a0filers\u00a0and at\u00a0$2,000\u00a0for joint\u00a0filers.\u00a0It is obviously intended for non-itemizers.\u00a0Unlike the itemized\u00a0version, the\u00a0non-itemized\u00a0version\u00a0will be\u00a0restricted to\u00a0donations by cash or check.\u00a0It\u00a0will\u00a0not\u00a0be\u00a0subject to the new 0.5% \u201cfloor\u201d.<\/span><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;335559685&quot;:720}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">The Four\u00a0\u201cNo Tax On\u2026\u201d\u00a0Below-the-Line Deductions<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Under OBBBA, you\u00a0are still required to\u00a0report tips, overtime pay, and social security as taxable income. However,\u00a0there are\u00a0three new deductions\u00a0that\u00a0may reduce or\u00a0eliminate\u00a0the taxable amount.\u00a0There is also a new deduction for car loan interest.\u00a0All four deductions\u00a0are subject to\u00a0dollar amount\u00a0caps,\u00a0income-based phaseouts,\u00a0and\u00a0additional\u00a0restrictions.\u00a0All\u00a0four\u00a0will<\/span><span data-contrast=\"none\">\u00a0expire after 2028.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p>1. Tips<\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">The deduction for\u00a0<\/span><b><span data-contrast=\"none\">tips\u00a0<\/span><\/b><span data-contrast=\"none\">is capped at $25,000 regardless of filing status.\u00a0It begins to phase out at $150,000 of modified AGI for single filers and at $300,000 for married filing jointly.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">The IRS has published a list of \u201ctipped occupation codes\u201d they consider valid for purposes of this deduction:\u00a0<\/span><a href=\"https:\/\/shorturl.at\/k1Gi2\"><span data-contrast=\"none\">https:\/\/shorturl.at\/k1Gi2<\/span><\/a><span data-contrast=\"none\">.\u00a0<\/span><span data-contrast=\"none\">The list\u00a0does not include artists, musicians, entertainers,\u00a0or\u00a0accountants, or any other\u00a0specified service trades or businesses\u00a0(SSTBs).<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">Sole proprietors may not deduct more in tips than their net income\u00a0from the business through which the tips were earned.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559740&quot;:252}\">\u00a02. OT Pay<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">The deduction for\u00a0<\/span><b><span data-contrast=\"none\">overtime<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><b><span data-contrast=\"none\">pay\u00a0<\/span><\/b><span data-contrast=\"none\">is capped at $25,000 for joint filers, regardless of which spouse had the overtime pay. It is capped at $12,500 for single filers. It begins to phase out at $150,000 of modified AGI for single filers and at $300,000 for married filing jointly.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">This deduction is taken on the \u201cand a half\u201d portion of \u201ctime and a half\u201d pay. In other words, if you had $1,500 in overtime pay for work that would have earned you $1,000 during non-overtime hours, then you would deduct the extra $500. The amount of overtime an employee can deduct should be reported by the employer.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559737&quot;:118,&quot;335559740&quot;:252}\">3. Seniors<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">The deduction for\u00a0<\/span><b><span data-contrast=\"none\">social\u00a0security<\/span><\/b><span data-contrast=\"none\">\u00a0is not in any way capped by the amount of social security\u00a0benefits\u00a0the taxpayer\u00a0actually received\u00a0during the year. It is available to all filers age 65 and older and has a maximum value of\u00a0$6,000 per person.\u00a0It begins to phase out at $75,000 of modified AGI for single filers and at $150,000 for married filing jointly.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">Note that this deduction is taken in addition to the increased standard deduction for taxpayers aged 65 and older.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559737&quot;:118,&quot;335559740&quot;:252}\">4. Car Loan Interest<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">There is also a new\u00a0deduction on<\/span><b><span data-contrast=\"none\">\u00a0car loan interest<\/span><\/b><span data-contrast=\"none\">. It is capped\u00a0at\u00a0$10,000.\u00a0It begins to phase out at $100,000 of modified AGI for single filers and at $200,000 for married filing jointly.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span data-contrast=\"none\">This deduction applies only to car loans taken out after December 31, 2024. The vehicle must be new, assembled in the U.S., and cannot have a GVW of more than\u00a014,000 lbs. The deduction cannot be taken for vehicles used for business or bought for resale.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:76,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">All four of these deductions are below-the-line deductions, meaning they are taken after AGI\u00a0is computed. All four will expire\u00a0after\u00a02028 if not extended by Congress.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Changes to the Qualified Business Income Deduction<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0<\/span><span data-contrast=\"none\">Tax Cuts and Jobs Act of 2017<\/span><span data-contrast=\"none\">\u00a0(TCJA) cut corporate income tax to 21%.\u00a0In order to\u00a0compensate\u00a0unincorporated businesses, TCJA introduced the qualified business income deduction (QBID). The QBID is a below-the-line deduction worth a maximum of 20% of business income, subject to certain restrictions.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">While the corporate tax rate cut was permanent in TCJA, the QBID was set to expire in 2025.\u00a0<\/span><b><span data-contrast=\"none\">The OBBBA now makes the QBID permanent<\/span><\/b><span data-contrast=\"none\">\u00a0as well.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The general structure of the QBID\u00a0remains\u00a0as before. For 2025, the phaseout thresholds for higher earners begin at\u00a0<\/span><span data-contrast=\"none\">$197,300 for single filers and $394,600 for joint\u202ffilers.\u00a0Above these thresholds, the amount of QBID begins to phase out for\u00a0<\/span><span data-contrast=\"none\">specified service trades or businesses (SSTBs). For non-SSTBs, t<\/span><span data-contrast=\"none\">he amount of QBID begins to be limited by wage and property requirements.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The upper threshold for the phaseout is\u00a0$272,300 of taxable income for single filers and $544,600 for joint filers. Above these thresholds, SSTBs can no longer take any QBID. Non-SSTBs must fully meet wage\u00a0expense\u00a0and property investment requirements to continue taking the full 20% deduction.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">As before, QBID for all earners is limited to the taxpayer\u2019s taxable income minus net capital gains.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">One change that OBBBA introduces to QBID is a\u00a0<\/span><b><span data-contrast=\"none\">$400 guaranteed minimum\u00a0<\/span><\/b><span data-contrast=\"none\">deduction to any taxpayer who has at least $1,000 in qualified business income so long as the business income is \u201cactive\u201d. The definition of \u201cactive\u201d for this purpose should follow \u201cmaterial participation\u201d as defined for distinguishing passive from non-passive business activity. This guaranteed\u00a0minimum\u00a0amount applies if the aggregate of all your active qualified business income is at least $1,000.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Capital\u00a0Gain\u00a0Tax\u00a0Rates<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:0}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Tax on long-term capital gains and qualified dividends for\u00a02025\u00a0is as follows:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<table data-tablestyle=\"MsoTableGrid\" data-tablelook=\"1184\" aria-rowcount=\"4\">\n<tbody>\n<tr aria-rowindex=\"1\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">Single<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">Married Filing Jointly<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">Rate<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"2\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$0 &#8211; $48,350<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$0 &#8211; $96,700<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">0%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"3\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$48,351\u00a0&#8211; $533,400<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$96,701\u00a0&#8211; $600,050<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">15%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"4\">\n<td data-celllook=\"0\"><span data-contrast=\"none\">$533,401\u00a0or more<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">$600,051\u00a0or more<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<td data-celllook=\"0\"><span data-contrast=\"none\">20%<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:140,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span data-contrast=\"none\">Note that these rates apply in a\u00a0graduated\u00a0manner to all your taxable income. So, for instance, if you are single and have $40,000 of\u00a0taxable income before considering capital gains and qualified dividends, then only the first $8,350\u00a0of your long-term capital gains qualify for the zero rate.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Net Investment Income Tax<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">In accordance with\u00a0the\u00a0<\/span><span data-contrast=\"none\">Affordable Care Act of 2010<\/span><span data-contrast=\"none\">, the 3.8% net investment income tax (NIIT) continues to apply to income from capital gains, dividends, interest income, royalty , and rental income. The amount of income subject to NIIT is the lesser of:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1080,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Total investment income as defined above or<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/li>\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1080,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Modified AGI\u00a0in excess of\u00a0$200,000\u00a0for single filers\u00a0and $250,000\u00a0for\u00a0joint filers.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span data-contrast=\"none\">The NIIT is then added to your total tax.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Dependent Credits<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0<\/span><b><span data-contrast=\"none\">child tax credit<\/span><\/b><span data-contrast=\"none\">\u00a0has been\u00a0increased to\u00a0$2,200 for each qualifying child who was under the age of 17 at the end of\u00a02025. The refundable\u00a0portion\u00a0of the credit\u00a0remains\u00a0at\u00a0$1,700.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0<\/span><b><span data-contrast=\"none\">credit for other dependents<\/span><\/b><span data-contrast=\"none\">\u00a0remains\u00a0$500 for each qualifying child who was 17 or 18 years old the end of\u00a02025\u00a0or was a student not yet of age 24 at the end of that\u00a0year, or\u00a0was of any age but permanently and totally disabled.\u00a0None of\u00a0the credit for other dependents is refundable.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">This\u00a0$500 credit is also available for qualifying relatives whose gross income was less than $5,250\u00a0in\u00a02025. Note that a qualifying child can earn more than this and still be claimed as a dependent.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Both the\u00a0child\u00a0tax\u00a0credit and the\u00a0credit for\u00a0other\u00a0dependents begin to phase out for taxpayers whose AGI is greater than $200,000 ($400,000 for\u00a0married\u00a0filing\u00a0jointly).<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Adoption\u00a0Credit<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">For\u00a02025,\u00a0the\u00a0adoption\u00a0credit\u00a0is\u00a0available\u00a0for\u00a0up\u00a0to\u00a0$17,280\u00a0of\u00a0qualified\u00a0expenses.\u00a0For\u00a0a\u00a0special-needs\u00a0adoption,\u00a0the\u00a0maximum\u00a0credit\u00a0may be taken\u00a0even\u00a0if\u00a0the actual costs\u00a0were\u00a0less.\u00a0The\u00a0credit begins\u00a0to\u00a0phase\u00a0out\u00a0for\u00a0taxpayers\u00a0with\u00a0modified\u00a0AGI\u00a0above\u00a0$259,190\u00a0and is completely phased out at\u00a0$299,190.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Under OBBBA, $5,000 of this credit is now refundable.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Gift\u00a0and\u00a0Estate\u00a0Taxes<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0annual\u00a0gift\u00a0tax\u00a0exclusion\u00a0for\u00a02025\u00a0has\u00a0increased\u00a0to\u00a0<\/span><b><span data-contrast=\"none\">$19,000\u00a0per\u00a0taxpayer<\/span><\/b><span data-contrast=\"none\">.\u00a0So, an\u00a0individual\u00a0can\u00a0give\u00a0up\u00a0to\u00a0$19,000\u00a0<\/span><b><span data-contrast=\"none\">($38,000\u00a0with\u00a0spouse<\/span><\/b><span data-contrast=\"none\">)\u00a0to\u00a0each\u00a0child,\u00a0grandchild\u00a0or\u00a0any other\u00a0taxpayer\u00a0in\u00a02025\u00a0without\u00a0being\u00a0required\u00a0to\u00a0file\u00a0a\u00a0gift\u00a0tax\u00a0return.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0lifetime\u00a0estate\u00a0and\u00a0gift tax exemption for\u00a02025\u00a0has increased to $15\u00a0million\u00a0per individual.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Mileage\u00a0Rates<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a02025\u00a0mileage rate for business purposes has increased to\u00a070\u00a2 per mile.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The rate for miles driven in service of charitable organizations\u00a0remains\u00a0unchanged at 14\u00a2 per mile.\u00a0The rate for military moving expenses and for medical transportation is 21\u00a2 per mile.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Energy Credits<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">One of the major effects of the OBBBA is to rapidly phase out many generous energy credits provided by the\u00a0<\/span><span data-contrast=\"none\">Inflation Reduction Act of 2022<\/span><span data-contrast=\"none\">. These credits were originally supposed to be available until the 2030s, but most will now expire much sooner.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The<\/span><b><span data-contrast=\"none\">\u00a0clean\u00a0vehicle\u00a0credit<\/span><\/b><span data-contrast=\"none\">\u00a0can still be claimed for 2025, but only for qualifying vehicles\u00a0purchased\u00a0by the end of September 2025.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The\u00a0<\/span><b><span data-contrast=\"none\">energy\u00a0efficient\u00a0home\u00a0improvement\u00a0credit<\/span><\/b><span data-contrast=\"none\">\u00a0and\u00a0<\/span><b><span data-contrast=\"none\">residential\u00a0clean\u00a0energy\u00a0credit<\/span><\/b><span data-contrast=\"none\">\u00a0are available through the end of 2025. In the past, unused portions of these credits could be carried forward to future years. It is not yet clear if this will still be possible for portions that re0main unused after 2025.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">For a business to claim<\/span><b><span data-contrast=\"none\">\u00a0business credit<\/span><\/b><span data-contrast=\"none\">\u00a0for wind or solar property, the property<\/span><span data-contrast=\"auto\">\u00a0<\/span><span data-contrast=\"none\">must either begin construction before July 5, 2026, or be placed in service by December 31, 2027.\u00a0Business credit\u00a0for energy storage, hydropower, and geothermal will not phase out until 2033.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">OBBBA also restricts these business\u00a0credits if\u00a0they are generated by\u00a0either a \u201cspecified foreign entity\u201d or a \u201cforeign influenced entity.\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Research\u00a0and Experimental Expenses<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Under\u00a0OBBBA,\u00a0100% of\u00a0domestic\u00a0research and experimental costs\u00a0may now\u00a0be expensed.\u00a0Unamortized R&amp;E expenditures\u00a0remaining\u00a0from\u00a0tax years 2022-2024\u00a0may\u00a0be\u00a0amortized\u00a0in 2025 or ratably over 2025 and 2026.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Foreign R&amp;E\u00a0expenditures\u00a0must still be amortized over 15 years.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Depreciable Property<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Under OBBBA,\u00a0<\/span><b><span data-contrast=\"none\">bonus depreciation is permanently restored to 100%.<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The maximum\u00a0Section 179\u00a0deduction is\u00a0increased to\u00a0$2.5 million\u00a0and\u00a0begins\u00a0to phase out at\u00a0$4\u00a0million\u00a0of eligible\u00a0property\u00a0placed in service in 2025.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Most amazingly of all, OBBBA now allows 100% expensing of some real property. There are, of course, a number of requirements and restrictions. Most importantly, the property must be used for production, manufacturing, or refining activities. The activity must be performed by the owner, so lessors are not eligible. This provision is set to expire after 2028.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Digital Assets<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">All taxpayers must\u00a0state\u00a0on\u00a0Form 1040\u00a0whether\u00a0they received, sold, or otherwise exchanged\u00a0any\u00a0digital assets\u00a0during the year.\u00a0This includes cryptocurrency,\u00a0stablecoin, non-fungible tokens, and other\u00a0digital\u00a0assets.\u00a0This question is\u00a0informational and is\u00a0independent from the requirement to report gains or losses from\u00a0actual\u00a0sales.\u00a0Digital\u00a0assets are taxed much the same as stocks and other\u00a0capital assets.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The IRS has now finalized Form 1099-DA to report sales and exchanges of digital assets. For 2025, brokers are required to report gross proceeds of digital asset transactions. Starting in 2026, they will be required to report the basis for covered securities.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p aria-level=\"1\"><b><span data-contrast=\"none\">Forms\u00a01099<\/span><\/b><span data-ccp-props=\"{&quot;335559685&quot;:580,&quot;335559738&quot;:139,&quot;335559739&quot;:160}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Under OBBBA,\u00a0the threshold for filing\u00a0<\/span><b><span data-contrast=\"none\">Form 1099-K<\/span><\/b><span data-contrast=\"none\">\u00a0(payment card and\u00a0third-party\u00a0network transactions)\u00a0is restored to\u00a0$20,000\u202fand\u202f200 transactions, effective\u00a02025.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The threshold for filing\u00a0<\/span><b><span data-contrast=\"none\">Forms 1099-NEC<\/span><\/b><span data-contrast=\"none\">\u00a0and\u00a0<\/span><b><span data-contrast=\"none\">1099-MISC<\/span><\/b><span data-contrast=\"none\">\u00a0will be increased to $2,000, but only in 2026.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:720,&quot;335559737&quot;:118,&quot;335559739&quot;:160,&quot;335559740&quot;:252}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Preface: \u201cBy failing to prepare, you are preparing to fail.\u201d \u2014 Benjamin Franklin Tax Highlights to Help You Prepare for 2025 Tax Filing\u00a0 The\u00a0One Big Beautiful Bill Act\u00a0of 2025 (OBBBA) ushers in a new tax environment whose full effects will take several years to unfold and will likely require further clarification. Please join us now &hellip; <a href=\"https:\/\/www.saudercpa.com\/blog\/2026\/01\/10\/tax-highlights-to-help-you-prepare-for-2025-tax-filing\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Tax\u00a0Highlights\u00a0to\u00a0Help\u00a0You Prepare\u00a0for\u00a02025\u00a0Tax\u00a0Filing\u00a0&#8220;<\/span><\/a><\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/2777"}],"collection":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/comments?post=2777"}],"version-history":[{"count":9,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/2777\/revisions"}],"predecessor-version":[{"id":2786,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/2777\/revisions\/2786"}],"wp:attachment":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/media?parent=2777"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/categories?post=2777"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/tags?post=2777"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}