Tax Law Updates for the 2026 Filing Season

Big Changes, Bigger Savings: What’s New for Your 2025 Taxes

Tax season is coming up, and if you’re wondering what’s new for your 2025 tax return (the one you’ll file in 2026), you’re not alone! The tax code has seen some big updates, and whether you’re an individual or a small business owner, there’s good news and a few things to watch for. Here’s what you need to know—in plain English.

1. The Standard Deduction Gets a Boost

The standard deduction is the amount you can subtract from your income before taxes kick in. For 2025, it’s even bigger: $15,750 for singles, $31,500 for married couples, and $23,625 for heads of household. That means more of your income is tax-free!

2. Lower Tax Rates Are Here to Stay

The lower tax rates that started a few years ago are now permanent. Most people will keep paying less tax on each dollar they earn.

3. New Breaks for Tips and Overtime

If you work in a job where you earn tips or overtime, you can now deduct up to $25,000 in tips and $12,500 in overtime pay from your taxable income. Married couples can double those numbers! There are some rules, but for many, this means a lower tax bill.

4. Small Business Owners: 20% Deduction is Permanent

If you run a small business, you can keep deducting 20% of your business profits before calculating your taxes. This popular break is now here to stay.

5. Bigger Write-Offs for Business Purchases

Businesses can now immediately deduct up to $2.5 million of equipment and other qualifying purchases. Plus, 100% “bonus depreciation” is back, letting you write off the full cost in the year you buy it.

6. More Help for Families and Students

Child care tax credits are higher, and you can deduct more student loan interest. This is great news for working families and anyone paying off education debt.

7. Some Moving and Transportation Deductions Return

Certain moving expenses and transportation benefits are back for some workers and businesses.

8. New Employer Reporting Rules

Employers will see new requirements for reporting tips and overtime on W-2 forms, but there’s a transition period for 2025, so don’t panic—there’s time to adjust.

9. Inflation Adjustments

Many tax brackets, credits, and deductions will now automatically rise with inflation, helping your tax breaks keep up with the cost of living.

In a Nutshell:

2025 brings bigger deductions, more generous business write-offs, and new breaks for workers who earn tips or overtime. The IRS is also making it easier for businesses to invest and for families to get help with child care and student loans. Stay informed, plan ahead, and you’ll be ready to make the most of these changes!