The Trump administration’s significant legislation, known as the ‘One Big Beautiful Bill Act,’ is projected to lower individual taxes by $129 billion by the year 2025, as reported by the Tax Foundation, a tax research organization based in Washington, DC. They estimate that the average taxpayer could see a reduction of about $611, although the majority of these savings may primarily benefit middle and upper-middle-income earners, leaving low-income filers with minimal impact.
According to BDO, an international accounting and tax firm headquartered in Belgium, approximately 25,000 IRS employees have been laid off over the past year. Experts in taxation have expressed concerns that this staff reduction might have implications for the agency’s operations this year.
Here are six important points taxpayers should be aware of for their 2025 filings.
Will the SALT deduction be expanded this year?
Yes, the cap on the state and local tax (SALT) deduction has been raised to $40,000, a considerable increase from the previous $10,000 limit.
Is there a special deduction for the elderly this year?
What about tax exemptions on tips and overtime?
Calderon indicated that filers are required to provide proof of their overtime pay to tax authorities. Only the additional earnings from overtime will be eligible for deduction, not the base pay. For example, a worker who earns 1.5 times their usual rate during overtime can deduct only the 0.5 increase from their taxes, as explained by Gentner.
Will free direct filing with the IRS be an option?
Are there any changes to the child tax credit?
The Empire State Child Credit has been broadened for this tax season.
Are last year’s inflation refund checks taxable?
Yes, according to Calderon, that income will still be subject to federal taxes.
