As we approach the end of 2025, taxpayers and business owners should be aware of several important tax updates that may affect year-end considerations. Some of these updates arise from the OBBBA, while others reflect existing IRS rules and broader tax law developments. Below is a simplified checklist highlighting key changes and reminders for the 2025 tax year.
This 2025 tax checklist highlights key changes affecting individuals and businesses and complements our broader individual and business tax services.
OBBBA-Related Tax Changes for 2025
Expanded SALT Deduction (OBBBA)
The OBBBA increases the State and Local Tax (SALT) deduction to up to $40,000 for 2025, with phase-out beginning at above $500,000 MAGI for married filing jointly tax payer – a significant increase from the prior $10,000 cap. This may benefit homeowners and taxpayers in high-tax states.
Deductible Loan Interest for Certain Vehicles (OBBBA)
Up to $10,000 of loan interest on a personal-use vehicle purchased in 2025 may be deductible.
• Phase-out begins at $100,000 MAGI for single filers.
• The vehicle must be assembled in the United States.
• The VIN must be reported on the tax return.
Overtime and Tip Income Deduction (OBBBA)
For non-exempt employees, the OBBBA introduces a federal income tax deduction for:
• Up to $12,500 of overtime and tip income for single filers
• Up to $25,000 for married filing jointly
This reduces federal taxable income but does not eliminate payroll or other applicable taxes.
Additional Senior Bonus Deduction (OBBBA)
Qualifying seniors may claim an additional $6,000 deduction, with phase-outs beginning at:
• $75,000 MAGI for single filers
• $150,000 MAGI for married filing jointly
Other Key 2025 Tax Updates and Planning Reminders
(Not part of OBBBA but important for year-end decisions)
100% Bonus Depreciation Returns
Qualified property placed in service after January 19, 2025 may qualify for 100% bonus depreciation, offering significant planning opportunities for small businesses investing in equipment and eligible assets.
Expiration of Several Clean Energy & Vehicle Credits
Some clean energy and electric vehicle-related credits expire in late 2025 or 2026 depending on the category. Taxpayers considering home improvements or EV purchases should review specific deadlines to maximize available benefits.
New Digital Asset Reporting (Form 1099-DA)
Starting with 2025 transactions, brokers will issue Form 1099-DA in early 2026.
Note: Taxpayers are still responsible for tracking cost basis, as mandatory broker basis reporting begins in 2026, not 2025.
1099-K Threshold Remains Unchanged
Payment platforms will issue Form 1099-K only when both conditions are met:
• More than $20,000 in total payments
• More than 200 transactions
Taxpayers must still report all taxable income even without receiving a form.
Charitable Planning for Tax Efficiency
Taxpayers age 70½ or older may benefit from Qualified Charitable Distributions (QCDs) from IRAs, or from gifting cash to public charities to reduce taxable income.
Maximize 401(k), IRA and HSA Contributions
Year-end is the final opportunity to maximize contributions to tax-advantaged accounts to reduce 2025 taxable income and increase retirement savings.
Consider Donating Appreciated Securities
Donating appreciated stocks or funds held longer than one year can help reduce capital gains exposure while supporting charitable causes.
Trump Account Election
- Taxpayers with an eligible child born on or after January 1, 2025 – December 31, 2028 may make a Trump Account election on their 2025 federal return to establish eligibility for the $1,000 pilot program contribution.
- Contributions begin on or after July 4, 2026. Annual contributions are capped at $5,000 per child, inclusive of employer contributions of up to $2,500 per year, which are not treated as taxable income to the employee under an employer Trump Account contribution program. Trump Account election is subject to additional IRS and Treasury guidance.
Important Notice
This article is for informational purposes only and does not constitute tax advice. It is not an exhaustive list of all OBBBA provisions or IRS requirements.
For personalized guidance on how these updates may affect your situation, contact Baccus Consulting LLC at contact@baccusconsult.com or schedule a consultation at www.baccusconsult.com.
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