There is a New Tax Deduction for Seniors age 65 and older who are collecting Social Security. The Deduction is $6K per person and phases out at income levels of $75K for Single Filers and $150K for Married Filing Jointly Filers.

There is a New Tax Deduction for Tip Income up to $25K which phases out at $150K for Single Filers and $300K for Married Filing Jointly Filers. So, the first $25K of Tip Income will be reduced by the Deduction and effectively not be taxed. The $25K limit is per Tax Return, not individual.

There is a New Deduction for Overtime Pay of $12,500 per person up to $25K on a Joint Tax Return. The Phaseout limit is $150K for Single Filers and $300K for Married Filing Jointly Filers. This Deduction is in effect for Tax Years 2025 – 2028.

There a new Deduction for Car Loan Interest of up to $10K. It phases out at $100K for Single filers and $200K for Married Filing Jointly.

The State and Local Tax Limit which includes the total of Property Taxes, State Income or Sales Tax increases from $10K to $40K. The $10K limit was initially imposed in 2018.

The definition of income in the above Phase Out Limits is Modified Adjusted Gross Income which is your Adjusted Gross Income plus add backs such as Tax Exempt Interest, Non Taxable portion of Social Security Benefits, Student Loan Interest and IRAs. You can find your Adjusted Gross Income on Line 11 Page 1of your Individual Tax Returns Form 1040 and line 11a of your 2025 Form 1040.

Energy Credits terminate as of 12/31/2025.

If you would like additional information, please email us.

Thank you!

Deb