Trump accounts and new Form 4547. Recent legislation allows parents, guardians, and other authorized individuals to elect to establish a new type of individual retirement account, called a Trump account, for the exclusive benefit of certain children. If the child was born after 2024 and before 2029, is a U.S. citizen, and meets certain other requirements, the authorized individual may also elect to receive a $1,000 pilot program contribution to the child’s Trump account. Both elections can be made on Form 4547, which can be filed at the same time as the authorized individual’s 2025 income tax return. For more information on Trump accounts, and to learn how to make these elections, see Form 4547 and its instructions.
Standard deduction amount increased. For 2025, the standard deduction amount has been increased for all filers. The amounts are:
- $15,750–Single or Married filing separately.
- $31,500–Married filing jointly or Qualifying surviving spouse.
- $23,625–Head of household.
Higher catch-up contribution limit for ages 60 to 63. If, at the end of 2025, you were at least age 60, but younger than age 64, and you participated in a deferred compensation plan (including most 401(k), 403(b), governmental 457 plans, and the governmental Thrift Savings Plan), a higher catch-up contribution limit may apply to you. For 2025, this higher catch-up contribution limit is $11,250 ($5,250 for section 401(k)(11) and SIMPLE plans). For more information, contact your plan administrator.
Main home was in the U.S. If your main home (and spouse if filing a joint return) was in the U.S. for over half of 2025, check the box on the front of Form 1040 or 1040-SR. Providing this information will help the IRS determine your eligibility for certain tax benefits, including the earned income credit.
Changes to the Dependents section. The Dependents section now has numbered rows and asks for more information about you and your dependents. This new information is being asked to help the IRS determine your eligibility for certain tax benefits, including the child tax credit, the credit for other dependents, and the earned income credit.
Write-in information. Beginning in 2025, most of the words, codes, and/or dollar amounts that are used to explain an item of income or deduction, and that you previously had to enter next to a specific line, now have a dedicated checkbox or entry space.
Death of a taxpayer. If you need to file a return for someone who died before filing a 2025 return, check the “Deceased” box at the top of Form 1040 or 1040-SR and enter the date of death. For more information, see Death of a Taxpayer.
Contributions to a governmental paid family leave program. Beginning in 2025, if you made contributions to a governmental paid family leave program, you will now include the full amount of those contributions in your income. If you itemize your deductions on Schedule A, you can include the amounts contributed as part of the state and local taxes that you paid.
Form 1099-DA. If, in 2025, you used a broker to effect the sale of a digital asset, your broker should send you a Form 1099-DA that reports information regarding the transaction. In 2025, your broker has the option to report your basis in the digital asset on Form 1099-DA but is not required to do so. If your broker did not report your basis on Form 1099-DA, you will need to use your own books and records to determine your basis. As a reminder, you must answer the digital asset question on Form 1040 whether or not you received a Form 1099-DA, and you must report gain or loss from the transaction with respect to the digital assets (see line 7(a)). For more information, see the Instructions for Form 1099-DA.
Electronic payments and direct deposit. If you have access to U.S. banking services or electronic payments systems, you should use direct deposit for any refunds. The IRS recommends paying electronically whenever possible. Options to pay electronically include using your bank account with Direct Pay, your debit or credit card, your digital wallet, or your online account. Go to IRS.gov/Payments to see all your payment options. Also, see ModernPayments.
New deductions for itemizers and non-itemizers. Recent legislation provided for four new deductions that take effect beginning in 2025. If you are eligible, you can claim these deductions if you take the standard deduction or if you itemize on Schedule A. For more information on these deductions, see the instructions for Schedule 1-A. The new deductions are as follows.
- No tax on tips. You may be eligible to take a deduction for qualified tips paid to you in 2025. You can’t deduct more than $25,000 of those tips. Your deduction will be limited if your modified adjusted gross income is more than $150,000 ($300,000 if married filing jointly). To be eligible, you and/or your spouse who received the tips must have a valid SSN. If you are married, you must file a joint return.
- No tax on overtime. If you earned qualified overtime, you may be eligible to deduct up to $12,500 ($25,000 if married filing jointly) of your qualified overtime compensation. Your deduction will be limited if your modified adjusted gross income is more than $150,000 ($300,000 if married filing jointly). To be eligible, you and/or your spouse who received the overtime must have a valid SSN. If you are married, you must file a joint return.
- No tax on car loan interest. If you paid or accrued qualified passenger vehicle loan interest on a vehicle you purchased in 2025 for personal use, you may be eligible to deduct up to $10,000 of that interest. Your deduction will be limited if your modified adjusted gross income is more than $100,000 ($200,000 if married filing jointly).
- Enhanced deduction for seniors. If you were born before January 2, 1961,