Increased amounts of standard deductions
- Single and Married Filing Separately – $15,750
- Married Filing Joint – $31,500
- Head of Household $23,625
- Additional deductions for disabled and blind taxpayers
State and local tax deduction has increased from $10,000 to $40,000
- Increase is phased out for modified adjusted gross income
- between $500,000 and $600,000 for joint returns
- between $250,000 and $300,000 for single returns
New additional deduction for seniors age 65 of $6,000 regardless of whether deductions are itemized or standard
- Deduction phases out by 6% of modified adjusted gross income
- Above $150,000 for joint return
- Above $75,000 for single returns
New automobile loan interest deduction for up to $10,000 interest paid on 2025 car loans secured by new passenger vehicles assembled in the USA and used only for personal use
- Deduction phases out at modified adjusted gross income
- $249,001 for joint returns
- $149,001 for single returns
- Available regardless of whether deductions are itemized or standard
Changes in charitable donation deductions
- New deduction for charitable donations if deductions are not itemized
- Up to $2,000 for joint returns
- Up to $1,000 for single returns
- New floor for charitable donation deductions after 2025
- Only deductions that exceed .5% of adjusted gross income are included as itemized deductions with any disallowed deductions available for carryforward
New deduction for overtime pay available regardless of whether deductions are itemized or standard. The deduction applies to the pay in excess of regular hourly pay:
- $25,000 for joint returns phased out at modified adjusted gross income between $300,000 and $550,000
- $12,500 for single returns phased out at modified adjusted gross income between $150,000 and $275,000
New deduction for qualified tips of up to $25,000 available regardless of whether deductions are itemized
- Must be reported to taxpayer on W2 or 1099
- Deduction phases out for modified adjusted gross income between
- $300,000 and $550,000 for joint returns
- $150,000 and $400,000
Increased child tax credit to $2,200 per qualifying child
Terminated the New Clean Vehicle and Previously Owned Clean Vehicle Tax Credits for vehicles acquired after September 30, 2025