2025 Changes

Standard Deduction - MFJ

$31,500

Standard Deduction - Single/MFS

$15,750

Standard Deduction - HOH

$23,625

Qualified Tips (2025-2028)

Deduction up to $25k, MAGI phaseout at $150k ($300k for MFJ)

Qualified OT (2025-2028)

Deduction up to $12,500 ($25k for MFJ), MAGI phaseout at $150k ($300k for MFJ)

MAGI (Modified Adjusted Gross Income)

Take your AGI, then add back certain deductions (Student loan interest, IRA contributions, taxable SS payments, tuition and fees, ½ SE tax, foreign income and housing expenses, interest from EE savings bonds used for education, passive income or loss, rental expenses, adoption expenses)

Used for: Roth IRA Contributions, Premium Tax Credit, Student Loan Interest Deduction

AGI (Adjusted Gross Income)

Gross Income (Wages, interest, dividends, business income, unemployment compensation, capital gains/loss, retirement plan distributions) and subtract “Above-the-line” Deductions reported on Schedule 1 (Educator expenses, IRA contributions, student loan interest, HSA deduction, ½ SE tax, SE health insurance, Alimony paid (Agreements prior to 2019))

Qualified Passenger Vehicle Loan Interest Deduction

Up to $10k of interest paid on vehicles that are

• New

• 100% personal use

• Assembled in the US

• Phaseout for MAGI over $100k ($200k MFJ)

Enhanced Deduction for Seniors (Temporary)

Additional $6k deduction per eligible individual 65+ for 2025-2028

• MAGI Phaseout over $75k ($150k MFJ)

Trump Accounts

Children born after 12/31/24 and before 1/1/29 will receive a one-time $1k contribution

• Parents, guardians, and employers may contribute up to $5k annually (indexed for inflation

• Can’t be withdrawn before the child turns 18

Qualified Disaster Loss

Loss is deductible without having to itemize

• Not subject to the 10% AGI limitation

• Per-casualty floor is increased from $100 to $500

Higher Catch-up Limit

Ages 60-63 at end of tax year - for 401(k), 403(b), 457(b) plans = $11,250

Penalty Withdrawal Exceptions (SECURE Act 2.0)

Emergency withdrawals - up to $1k/year for unforeseeable or immediate financial needs

Domestic Abuse Victims - The lesser of $10k or 50% of the account balance

2025 Tax Rates

10%, 12%, 22%, 24%, 32%, 35%, and 37%

• NRs are taxed at a flat 30% rate unless specified by treaty

Dependency Gross Income Test

Gross income limitation for qualifying relative is $5,200

Roth and Traditional IRA Limits

$7k (Additional catch-up of $1k for age 50+)

Kiddie Tax

Under 18 and certain dependents under 24.

• Unearned income threshold is $2,700

Nanny Tax - Household Employees

2025 threshold = $2,800

• Household employers are obligated to withhold and pay FICA

$1k/EE or more in a calendar quarter → ER is required to pay FUTA

OASDI maximum wage base

$176,100

EE & ER FICA

6.2% Social Security + 1.45% Medicare

• Self-employment tax = 15.3%

Additional Medicare Tax

.9% on earned income exceeding:

• MFJ: $250k

• MFS: $125k

• Single/HOH/QSS: $200k

Gain on sale of collectibles

Artwork, antiques, stamps, etc → Max 28%

Unrecaptured 1250 gain

Applies to depreciable real estate property → Max 25%

NIIT

3.8% tax applies to individuals, estates, and trusts with net investment income above the following thresholds:

• MFJ/QSS: $250k

• Single/HOH: $200k

• MFS: $125k

• Estates/Trusts: $15,650

2025 Bonus Depreciation

100% bonus depreciation made permanent for qualified property acquired and placed in service on or after 1/19/25

• Property acquired before 1/19/25 is subject to 40% bonus depreciation in 2025

2025 Section 179 Deduction

Maximum expense if $2.5m

• Limit is reduced by the amount by which the cost of Section 179 property placed in service during the tax year exceeds $4m

• Investment phaseout threshold ends at $6.5m

QBI Deduction Limits

MFJ: $394,600 - $494,600

All other filing statuses: $197,300 - $247,300