What You Need to Know for 2025 Individual Tax Filings
Tax year 2025 includes several important federal and state changes that impact how returns are prepared, reviewed, and filed. Many new credits and deductions also come with added documentation and income limits.
Action Required
Electronic Payments Only
In order to file we need your bank details
You must provide your bank routing number and account number to us along with your tax support. The IRS no longer accepts or issues paper checks — all payments and refunds are now processed electronically.
- The IRS and New York State no longer accept paper checks or issue checks for refunds.
- All estimates and balances due must be paid electronically
- Providing up front helps avoid penalties and delays
Important Notes on Tax Preparation Fees
- Many 2025 credits and deductions come with income limits, expanded documentation requirements, and additional calculations and review.
- Returns that include these items often require more preparation time, which may affect overall tax preparation fees.
IRS Process and Payment Changes
Increased IRS Matching and Review
- Income, retirement, and investment data is closely matched
- Even small discrepancies can trigger notices
- Accuracy and reconciliation are more important than ever
Major 2025 Credits and Deductions
Child Tax Credit
- Increased to $2,200 per qualifying child
- May still be partially refundable
- Income limits and phaseouts apply
Senior Deduction (Age 65+)
- New bonus deduction up to $6,000 per person
- Up to $12,000 for married couples both 65+
- Applies in addition to the standard deduction
- Phases out at higher income levels
Car Loan Interest Deduction
- New above-the-line deduction for interest on qualifying personal auto loans
- Up to $10,000 per year
- Applies only to vehicles assembled in the U.S.
- Loan must be issued after December 31, 2024
- Income limits apply
Overtime Pay Deduction
- New deduction for qualified overtime income
- Up to $12,500 for single filers
- Up to $25,000 for joint filers
- Subject to income limits
Tip Income Deduction
- New deduction for qualified tip income
- Applies to eligible occupations
- Tip income must be properly reported on W-2 or 1099 forms
Retirement Income and Planning
Required Minimum Distributions (RMDs)
- Rules and timing continue to evolve
- Missed or incorrect RMDs may result in penalties
Roth IRAs and Roth Conversions
- Conversions require detailed reporting and income review
- Errors can lead to overpaid tax or IRS correspondence
Common Life Events That Impact Your Return
These situations often require additional calculations or documentation:
- New dependents or family changes
- College tuition or student loan interest
- Childcare or dependent care expenses
- Retirement income or Social Security benefits
- Sale of a home or investments
- Charitable contributions
Charitable Giving Rules
Qualified Charitable Distributions (QCDs)
- Available for taxpayers age 70½ and older
- Often not reported correctly on tax forms
- Additional documentation may be required
Additional 2025 Adjustments to Be Aware Of
- Standard deduction amounts increased due to inflation
- Retirement contribution limits increased for IRAs and 401(k)s
- Education and childcare credits updated with new income limits
- Charitable giving documentation requirements tightened
- Energy and EV credits have stricter eligibility and verification rules
What You Can Do Now
Keep thorough and organized records
Share changes in income, dependents, or major purchases
Questions or Need Help?
If you have questions about how these 2025 tax changes apply to you, please reach out to your accountant directly.
You can also email our team, and we will make sure your question gets to the right person.
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