2025-2026 Tax Season: New Deductions and Required Forms for Filing
The passage of the federal One Big Beautiful Bill in 2025
dramatically affects business and personal income taxes, as well as payroll W-2
reporting for 2025. While many deductions and credits remain the same, the
following are notable changes that may impact those with the following
situations:
Tips and overtime income - If you have W2 tip income
or overtime income, there should be data in W2 Box 14 or a supplemental notice
from the employer regarding qualifying amounts related to these 2 specific
items:
Tips - deduction of up to $25,000 per taxpayer with
phaseout for Modified Adjusted Gross Income (MAGI) over $150,000 (over $300,000
for Married Filing Jointly).
Working overtime - deduction of up to $12,500 per
taxpayer with phaseout for MAGI over $150,000 (over $300,000 for Married Filing
Jointly).
Social Security recipients - There is an additional
$6,000 per-person senior Social Security deduction for 2025 – 2028 for those
age 65 and older, with a phaseout for MAGI over $75,000 (over $150,000 for
Married Filing Jointly). For those receiving Social Security, this is a favorable
change that may help reduce income taxes.
Child Tax Credit - The child tax credit increases to
$ 2,200 for dependents under age 17. Over 17 remains at $500.
529 plans - 529 plan tax considerations have been
modified; reach out to a financial or tax professional for clarification.
State and Local Tax (SALT) - The Schedule A SALT cap
deduction increases to $40K – the combined property tax and state income taxes
that can apply toward itemized deductions. There may be other miscellaneous
deductions includable depending on your situation.
New vehicle deduction – A qualifying new vehicle
deduction of $10,000 for interest paid on a loan for a new vehicle assembled in
the United States and purchased in 2025 may apply. The bill of sale will be
required, along with documentation of the interest paid.
Cryptocurrency/digital assets – Investors must report
selling or using digital assets to pay for a transaction. These asset sales
have always been taxable; however, include the form for filing 2025 taxes.
Home Energy Efficiency - Energy efficiency home
improvement credits end in 2025. If a new furnace, A/C, boiler, heat pump,
water heater, woodstove, windows, doors, insulation, solar, or battery storage
was installed, provide a copy of the invoice for filing purposes.
Required forms
for filing
Below are some of the documents that may be needed to file
2025 income taxes, depending on one's situation:
- W-2 for wages
- 1099-Int for interest
- 1099-DIV for dividends
- 1099-B Brokerage
- SSA-1099 Social Security
- 1099-NEC for income
- 1099-Misc for income
- 1099-K for income
- 1099-R for retirement income
- 1099-G for refunds & unemployment
- 1099-Int for mortgages
- 1098-T for tuition
- 1099-SA for HSAs
- K-1 forms from investments in S corporations or partnerships
- Form 5498 for IRA values
- Form 1098-VLI for new car loan interest
- For 1099-DA for digital assets
- IRA and Roth IRA contributions for 2025
- Childcare costs, and the name, address, amount, and Tax ID #
of the recipient
- Charitable donations: total amounts and recipients
- Property tax paid on primary residence
- Estimated tax payments and dates
- Any letters received from the IRS or state tax
authorities
The IRS officially began accepting 2026 tax season returns
on Monday, January 26, 2026, with the filing deadline of Wednesday, April 15,
2026. If you have any questions regarding investments, securities, purchases,
or deductions specific to your situation, contact a financial or tax
professional for further information before filing.