2025 Tax Updates
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Each year the IRS makes changes to the tax laws and standard deductions. The following is the updated changes for the 2025 Tax year.
Tax Law Changes for Individuals:
Standard Deduction - Married $31,500
Standard Deduction - Head of Household $23,625
Single and Married filing separately $15,750
Annual Exclusion for gifts is $19,000.
Maximum earnings under full retirement age to receive full Social Security benefits: $23,400 for 2025 and $24,480 for 2026.
The business standard mileage rate is 70 cents per mile.
Child tax credit drops back down to $2,200 per child under 17 years of age and $500 per dependent 17 and older.
Contribution to an IRA is $7,000, additional $1,000 if over the age of 50.
RMD has increased to age 73, then will jump to 75 in 2033.
Form 1099-K will only be issued for 2024 (cash apps) when receipts are at least $5,000 in total for the year.
NEW: The One Big Beautiful Bill ACT (OBBBA)
SALT Deduction increased to $20,000 MFS or $40,000 MFJ for 2025-2029.
No Tax on Tips – up to $25,000 in qualified cash tips.
No Tax on Overtime – Need pay stub – difference between regular pay and overtime pay.
Deductible Car Loan Interest – Need VIN # - For new personal vehicles financed in 2025-2028 that was manufactured in America, deduction is capped at $10,000 (income limits apply).
Trump Accounts – A one-time $1,000 deposit will be made into accounts opened for qualifying children born in 2025-2028.
Senior Deduction – A $6,000 deduction against social security per eligible taxpayer (65) for 2025-2028, income limitations apply based on modified adjusted gross income (MAGI).
Qualified Longevity Annuity Contracts – (QLACs) Deferred fixed annuity contract purchased with money from an existing IRA or 401(k). Purchasing the annuity qualifies it for special tax treatment. Up to $210,000 can be used to purchase the QLAC which will exclude RMD to age 85.