TAX UPDATES for 2025

The One Big Beautiful Bill Act (OBBBA), was signed into law on July 4, 2025.  It contains the most sweeping changes to tax law since the Tax Cuts and Jobs Act (TCJA) of 2017.  Below are some of the changes that will affect the most Americans, and what you can do to help us minimize your taxes.

Executive Order 14274 was signed on March 25, 2025 and requires the IRS to begin phasing out paper refund checks starting September 30,2025.

Increases in Standard Deduction

For 2025, the standard deduction amounts are:

• Single & Married Filing Separately:  $15,750

• Married Filing Jointly & Surviving Spoues:  $31,500

• Heads of Household:  $23,625

No Tax on Overtime

If you are a:

• non-exempt wage employee, 

• have a social security number, and 

• earn less than $150,000 (single) or $300,000 (married)

 . . . you (and your spouse) do not pay tax on overtime pay up to $12,500 per person

Note:  This only applies to the "overtime premium".  So, if you receive "time and a half" overtime pay, the "half" is not taxed

What to do:  Your employer may not report this on your W-2 for 2025, so make sure to SAVE YOUR LAST PAYSTUB OF 2025 and PROVIDE IT TO US FOR YOUR TAXES

No Tax on Tips

If you:

• work in one of the 68 professions listed here:

• with a social security number, and 

• earn less than $150,000 (single) or $300,000 (married)

 . . . you (and your spouse) do not pay tax on tips up to $25,000 per tax return

Note:  This only applies to VOLUNTARY gratuities, not mandatory gratuities

What to do:  Make sure to KEEP RECORDS OF VOLUNTARY TIPS RECEIVED and PROVIDE IT TO US FOR YOUR TAXES

The "Senior Bonus" Deduction

If you (or your spouse):

• are over age 65, and

• have a social security number

• earn less than $75,000 (single), or $150,000 (married)

 . . . you (and/or your spouse) get an additional tax deduction of $6,000 per person

Auto Loan Interest Deduction

If you:

• borrowed on a auto loan originating after 1/1/25,

• to purchased a new vehicle with final assembly in the USA (check here),

• that was for personal (not business) use, and 

• earn less than $100,000 (single) or $200,000 (married)

 . . . you can deduct automobile interest paid, up to $10,000

What to do:  KEEP YOUR VEHICLE PURCHASE AND LOAN PAPERWORK and PROVIDE IT TO US FOR YOUR TAXES

Trump Accounts

The OBBBA created new "Trump Accounts".  These are essentially tax deferred savings accounts for children born in 2025 - 2028.  They work like this:

• Upon receiving the child's Social Security Number, you get $1,000 from the government deposited to the Trump Account,

• Parents can also contribute up to $5,000 additional per year,

• Parents Employers can also contribute up to $2,500 additional per year,

• The account must be primarily invested in US companies or funds, and

. . . when your child reaches age 18, the Trump Account basically converts to a Traditional IRA

Note:  Under the current law, Trump Accounts cannot be opened until July 4, 2026

Elimination of Paper Refund Checks

In an effort to protect taxpayers, speed up refunds, and cuts costs, the IRS will no longer issue paper refund checks.  With limited exceptions, this means that most taxpayers will need a bank account to receive a 2025 tax refund.  More info can be found here.

Have questions about taxes?

• Reach out to us on your secure online tax portal, or 

• Call us at 602-544-1504 anytime!

Need to file a tax return?

• Make an appointment,

• Upload your tax documents online,

• Call us at 602-544-1504 anytime!