2025 Individual & Business Tax Provisions

INDIVIDUAL TAX PROVISIONS

  • 2025 Standard Deductions
    • Single and Married Filing Separately: $15,750
    • Head of Household: $23,625
    • Married Filing Jointly: $31,500
  • Child Tax Credit: The non-refundable child tax credit is $2,200 per child.
  • Estate and gift tax exemption: The gift tax exemption amount is $19,000 per individual.
  • SALT deduction cap: The state and local tax deducation cap is $40,000 per household and will be phased out for taxpayers with modified adjusted gross income (MGAGI) over $500,000.
  • Charitable deduction for non-itemized filing: Beginning in 2026, an above-the-line deduction is available for charitable contributions ($1,000 for single filing, $2,000 for joint filing).
  • No tax on tips and overtime: For 2025-2028, certain occupations will receive below-the-line deductions for qualified tips. Overtime premium pay, subject to limitations, will also receive below-the-line deductions.
  • Enhanced deduction for seniors: For 2025-2028, a $6,000 deduction is available for seniors age 65+ with income below $75,000 for individuals and married filing separately and $150,000 for joint filing.
  • Car loan interest deduction: For 2025-2028, up to $10,000 of interest on loans for U.S.-assembled passenger vehicles may be deducted, subject to income phaseouts.
  • Clean energy and IRS credits: Several clean energy credits from the Inflation Reduction Act are terminated.


BUSINESS TAX PROVISIONS

  • Bonus depreciation: 100% allowance for property acquired and placed in service on or after January 19, 2025.
  • R&E expenditures: Immediate deduction of domestic research or experimental expenses paid or incurred in 2025 is allowed. However, research or experimental expenses attributable to research that is conducted outside the U.S. will continue to be capitalized and amortized over 15 years.
  • Third-party network transaction reporting: From 1099-K reporting is required if transactions exceed $20,000 and the aggregate number of transactions exceeds 200.
  • Clean energy and IRS credits: Several clean energy credits from the Inflation Reduction Act are terminated.
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