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What’s new, who it helps, and why it matters
Clear, simple explanations of the new deductions and benefits that may put more money back in your pocket this tax season.
Effective for the 2025 tax year (returns filed in 2026)
Most people will pay less tax
You can subtract more income before taxes are calculated:
This lowers your taxable income automatically if you don’t itemize.
If you are 65 or older, you qualify for an additional deduction:
This is designed to reduce taxes for retirees and fixed-income households.
Income limits apply.
If you earn tips (servers, bartenders, delivery drivers):
If you worked overtime:
Important to know:
If you bought a U.S.-assembled vehicle and financed it:
This works similarly to a mortgage interest deduction, but for vehicles.
More people now qualify with more flexibility:
Example 1: Single Tipped Worker
Income:
Step 1 – Tip Deduction
Step 2 – Standard Deduction
Taxable Income
Without this law, taxable income would have been $44,250.
Tax savings: thousands of dollars.
Example 2: Married Couple With Overtime
Income:
Step 1 – Overtime Deduction
Step 2 – Standard Deduction
Taxable Income
Previously, taxable income would have been $67,500.
Example 3: Senior Taxpayer (65+)
Income:
Deductions
Taxable Income
Without the senior deduction, taxable income would have been $32,250.
At Thomflip Financial Services, this is why we ask detailed questions. Our goal is to protect you and keep your return compliant with IRS rules.
Just say the word.
