New Tax Deductions For Working Americans And Seniors

“No Tax on Tips” Deduction

Deduction Amount: Up to $25,000 annually.
Eligible Tips: Voluntary cash/charged tips reported on W-2, 1099, or Form 4137.
Who Qualifies: Employees and self-employed individuals in tip-eligible occupations (per IRS list by 10/2/2025).
Exclusions: SSTB individuals or employees of SSTBs are ineligible.
Income Phaseout: Over $150,000 ($300,000 joint).
Eligibility: Available whether itemizing or not.
Requirements: SSN must be included; must file jointly if married.
Reporting: Employers/payors must report tip data and occupation.
Transition Relief: IRS to provide for tax year 2025.

Deduction Amount: Up to $12,500 ($25,000 for joint filers).
Eligible Income: Overtime pay above regular rate per FLSA; must be reported on W-2/1099.
Income Phaseout: Over $150,000 ($300,000 joint).
Eligibility: Both itemizers and standard deduction filers.
Requirements: Must include SSN; joint return required if married.
Reporting: Employers/payors must report total qualified overtime pay.
Transition Relief: IRS will ease compliance for 2025.

Deduction Amount: Up to $10,000/year.
Eligible Loans: Originated after 12/31/2024, secured by new, U.S.-assembled personal-use vehicles.
Income Phaseout: Over $100,000 ($200,000 joint).
Refinanced Loans: Still eligible if original loan qualified.
Requirements: Must include VIN on tax return.
Reporting: Lenders must report qualified interest to IRS and borrower.
Eligibility: Standard and itemized filers.

Amount: $6,000 per eligible individual (age 65+); $12,000 for qualifying couples.
Phaseout: Over $75,000 ($150,000 joint).
Eligibility: Available to all filers with SSN; joint filing required if married.