Tax season can feel the same every year, but small rule changes can have a big impact on your refund or balance due. For the 2025 tax year, several updates are worth knowing early, especially if you claim the standard deduction, earn tips, work overtime, or are age 65 or older.
This guide breaks down the major takeaways highlighted in a recent overview from TIME and other publicly available IRS-related updates. It is written for everyday filers who want a clear checklist of what to watch for before they submit a return.
Note: This is general information, not tax advice. For guidance on your exact situation, consider a qualified tax pro or official IRS resources.
1) Standard deduction amounts are higher
The standard deduction is the simple option most people use. If you do not itemize deductions (like mortgage interest or charitable donations), the standard deduction is the amount you subtract from your income before calculating tax.
For the 2025 tax year, the standard deduction amounts reported in coverage of the new filing season include:
- Single (or Married Filing Separately): $15,000
- Married Filing Jointly: $30,000
That means many households can reduce taxable income without tracking receipts and itemized categories. If you normally itemize, it is still smart to compare both methods. Some years, the standard deduction wins even if you have a mortgage.
2) Tax brackets shift with inflation (and rates stay the same)
The U.S. uses a progressive tax system, so your income is taxed in layers (brackets). Bracket ranges commonly move upward over time due to inflation adjustments. That can help prevent “bracket creep,” where a small raise pushes more of your income into a higher tax range.
Most filers do not need to memorize bracket tables, but you should know this: even if your tax rate “bracket” changes, it does not mean every dollar you earned is taxed at that higher rate. Only the portion inside that bracket is taxed at the bracket’s rate.
If you want exact bracket thresholds for your filing status, confirm them on IRS.gov or in trusted tax software for the 2025 year before filing.
3) A new deduction for qualified tips (temporary)
If you earn tips, this filing season may look different. Coverage of the 2025 changes highlights a new, temporary rule that can reduce taxable income for qualified tip earnings (subject to limits and eligibility rules).
Important details to understand:
- It is described as a deduction tied to tips, not a blanket “ignore tips” rule.
- There may be caps on the amount that can be deducted.
- Eligibility may depend on whether your role is considered a job that “traditionally receives tips.”
- You still need proper reporting (such as W-2 reporting) to support what you claim.
If you work in food service, hospitality, salons, delivery, or other tip-heavy roles, keep clean records. Make sure your reported tips match what you actually received. If you underreport tips, you can create problems later even if you qualify for a deduction.
4) A deduction related to overtime premium pay (temporary)
Overtime can increase your paycheck, but it can also increase your tax bill, simply because you earned more. A 2025 update discussed in coverage of this filing season introduces a temporary deduction tied to certain overtime earnings.
One key concept: the rule is often discussed as applying to the overtime premium portion (the extra amount above your normal hourly pay rate). For example, if you earn “time and a half,” the premium is the “half” on top of your base pay.
Because overtime rules and payroll reporting can be complicated, this is one change where using reputable tax software (or a professional) can help you avoid mistakes.
5) Seniors may qualify for an extra deduction
If you are age 65 or older, there may be an additional deduction available on top of the standard deduction. In reporting on the 2025 changes, this senior-related boost is described as a meaningful add-on that can reduce taxable income and help some households keep more of their retirement income.
Why this matters: many retirees live on a mix of Social Security, pensions, and withdrawals from retirement accounts. A larger deduction can reduce the portion of total income exposed to tax, depending on your full situation.
If you are helping a parent or grandparent file, double-check that the return reflects age-related deductions correctly. Tax software usually prompts for birthdates and will apply the right amount, but errors happen.
6) IRS Free File can still be a strong option
If you qualify, IRS Free File can be one of the best ways to file a federal return at no cost. It is designed to connect eligible taxpayers with guided filing options from participating partners.
Practical tips if you plan to use Free File:
- Start at the official IRS page to avoid lookalike sites.
- Review eligibility rules (income limits can change).
- Gather documents first: W-2s, 1099s, interest statements, and any health insurance forms that apply to you.
- File early if you expect a refund, especially if you are claiming credits that can trigger extra verification.
If you do not qualify for Free File, you can still compare low-cost software options. For some households, a paid product can be worth it if it helps avoid errors or missed deductions.
Quick checklist before you file your 2025 return
- Confirm your filing status (Single, Married Filing Jointly, Head of Household, etc.).
- Decide standard vs. itemized (run both if you are unsure).
- Check tip and overtime reporting on your W-2 or pay statements.
- Verify age-related deductions if you are 65+ (or helping someone who is).
- Use reputable filing tools and keep copies of your return and supporting documents.
Source
This article is based on reporting and themes discussed in TIME: The Key Tax Changes to Know About Before You File This Year (TIME). Always verify final numbers and eligibility rules using official IRS resources or a tax professional.
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