SALT Deduction Expanded – The state and local tax (SALT) deduction cap has been increased to $40,000 for taxpayers with income under $500,000.
New Senior Income Deduction – Taxpayers age 65 and older may claim an additional deduction tied to the portion of Social Security or qualified retirement income included in federal taxable income if their income is below $75,000 Single/ $150,000 joint. 150K MFJ
Deductible Auto-Loan Interest – Interest on certain new vehicles assembled in the U.S. is now deductible for qualifying taxpayers, encouraging domestic vehicle purchases. The deduction beings to phase out at $100,000 single/ $200,00 joint income
Clean-Energy Credit Phasedown – Several electric-vehicle (EV) and renewable-energy tax credits begin to phase down starting in 2025 as federal clean-energy incentives are gradually reduced.
New Overtime Pay Deduction – Employees who receive qualified overtime pay can now deduct a capped portion (up to $12,500 single / $25,000 joint) of those earnings. The deduction begins to phase out for higher-income taxpayers (over $150,000 single / $300,000 joint).
Tip Income Exclusion – Eligible service workers (restaurant, hospitality, and personal-service industries) may now exclude up to $25,000 of reported cash tips from federal taxable wages if total income is below the established ceiling.
Charitable Donations are the same for 2025, but 2026 changes might impact when you should make the donations.
Starting in 2026.
· The tax benefit for itemized deductions is capped at a 35% deduction rate for high-income taxpayers in the top bracket. (37%)
· Itemized charitable gifts are only deductible if total contributions exceed 0.5% of AGI.
· Non-itemizers may claim an above-the-line deduction of $1,000 (single) or $2,000 (joint) for cash donations to qualified charities.
Key elements to consider for potential 2025 action:
· Itemize vs. standard If MAGI ≤ $500k, SALT cap $40k (phases down >$500k; ≈$10k at $600k+). If itemizing, pay Q4 state + assessed property tax by 12/31/25.
· Charity timing: : Itemizers—bunch into 2025 (DAF/appreciated stock). Non‑itemizers—consider Jan‑2026 for new $1k/$2k above‑the‑line; 2026 adds 0.5% AGI floor + 35% cap for itemized gifts
· Retirement: Max pre‑tax 2025 contributions (401(k)/IRA/SEP/solo‑401(k)) to lower MAGI and tax.