2025 Standard Deductions List as Follows: (Other Factors May Vary)
· Single Filers $15,750
· Head of Household $23,625
· Married Filing Jointly $31,500
· Married Filing Separately $15,750
Single or Head of Household get an extra $2,000 for being 65 or older and another $2,000 for being blind.
For Married Couples: An extra $1,600 for each spouse who is 65 or older and another $1,600 for each spouse who is blind.
Seniors have a special bonus deduction of up to $6,000 for individuals ($12,000 for joint filers) with a phase-out for higher-income taxpayers.
2025 Itemized Deductions List as Follows: (Other Factors May Vary)
State and Local Taxes (SALT): You can deduct state and local property taxes, plus either or sales taxes.
· Married Filing Jointly $40,000
· Single Filers $20,000
· Home Mortgage Interest
· Charitable Contributions
· Medical and Dental Expenses
· Casualty and Theft Losses
Income tax relief and deductions
New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137.
- “Qualified tips” are voluntary cash or charged tips received from customers or through tip sharing
- Maximum annual deduction is $25,000; for self-employed, deduction may not exceed individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.
- Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers)
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers. Self-employed individuals in a Specified Service Trade or Business (SSTB) under section 199A are not eligible. Employees whose employer is in an SSTB also are not eligible. Taxpayers must:
- Include their Social Security number on the return
- File jointly if married, to claim the deduction
Reporting: Employers and other payors must file information returns with the IRS (or SSA) and furnish statements to taxpayers showing certain cash tips received and the occupation of the tip recipient.
Guidance: By Oct. 2, 2025, the IRS must publish a list of occupations that “customarily and regularly” received tips on or before Dec. 31, 2024.
- The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and payors subject to the new reporting requirements.
No tax on overtime (Sec. 70202)
New deduction: Effective for 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay (such as the “half” portion of “time-and-a-half” compensation) that is required by the Fair Labor Standards Act (FLSA) and reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.
- Maximum annual deduction is $12,500 ($25,000 for joint filers).
- Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
Taxpayers must:
- Include their Social Security number on the return and
- File jointly if married, to claim the deduction.
Reporting: Employers and other payors are required to file information returns with the IRS (or SSA) and furnish statements to taxpayers showing the total amount of qualified overtime compensation paid during the year.
Guidance: The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and other payors subject to the new reporting requirements.
