2025 Tax Changes: What You Need to Know
Key Changes for 2025
The 2025 tax year brings several important changes that could significantly impact your tax return. Here's what you need to know to maximize your savings and stay compliant.
Standard Deduction Increases
The standard deduction has been increased for all filers in 2025:
- Single or Married filing separately: $15,750
- Married filing jointly or Qualifying surviving spouse: $31,500
- Head of household: $23,625
This is great news for most taxpayers, as the higher standard deduction means more of your income is protected from taxation.
New "No Tax on Tips" Deduction
One of the most exciting changes for 2025 is the new deduction for tips. If you're eligible, you can now deduct tips from your taxable income. This applies whether you take the standard deduction or itemize on Schedule A.
Trump Accounts for Children
A new type of individual retirement account called a "Trump account" is now available for children born after 2024 and before 2029. Parents, guardians, or other authorized individuals can:
- Establish a Trump account for the child's exclusive benefit
- Elect to receive a $1,000 pilot program contribution
Both elections can be made on the new Form 4547.
Higher Catch-Up Contributions for Ages 60-63
If you're between 60 and 63 years old and participate in a 401(k), 403(b), governmental 457 plan, or Thrift Savings Plan, you may be eligible for a higher catch-up contribution limit of $11,250 for 2025.
Digital Asset Reporting
If you sold digital assets through a broker in 2025, expect to receive Form 1099-DA. You must still answer the digital assets question on your Form 1040 or 1040-SR.
How We Can Help
At Monnoo & Co., we stay on top of every tax law change to ensure you benefit from every available credit and deduction. Contact us for a free consultation to see how these changes affect your specific situation.