Filing Your 2025 Taxes in 2026: Key Updates for Individuals
Updated: Nov 9, 2025
As the 2026 tax season approaches, here’s what individual taxpayers should know when preparing their 2025 returns. The new tax law passed in 2025 (the One Big Beautiful Bill Act) extended lower tax rates and introduced several new deductions, while also adjusting existing ones for inflation.
Standard Deduction (2025 Tax Year)
• Single / Married Filing Separately: $15,750
• Married Filing Jointly: $31,500
• Head of Household: $23,600
This remains nearly double pre‑2017 levels, meaning many taxpayers will continue to benefit from not itemizing.
Tax Brackets
The seven‑bracket system continues, with inflation‑adjusted thresholds. The top rate remains 37%, avoiding the scheduled increase to 39.6%.
Major Deduction & Credit Updates for 2025
• State and Local Tax (SALT) Deduction: The cap rises sharply from $10,000 to $40,000 for 2025, offering significant relief to California and other high‑tax state residents. A phase‑out applies for higher‑income households.
• New Car Loan Interest Deduction: Up to $10,000 in interest on qualifying new car loans (final assembly in the U.S.) can be deducted. This is front‑loaded, so the first year of a loan may provide the biggest benefit.
• Tips & Overtime Deduction: Certain occupations can deduct qualified tips and overtime pay, a new provision under the 2025 law. Guidance is still evolving, but taxpayers should keep detailed records.
• Senior Deduction: Taxpayers age 65+ may qualify for an additional deduction beyond the standard amount.
• Retirement Contributions:
• 401(k): $23,000 (+$7,500 catch‑up if 50+)
• IRA: $7,000 (+$1,000 catch‑up if 50+)
• Child Tax Credit: $2,000 per qualifying child, with phaseouts beginning at $200,000 (single) / $400,000 (joint).
Key Deadlines
• April 15, 2026: Filing and payment deadline
• October 15, 2026: Extended deadline (if Form 4868 filed)
Takeaway
The 2026 filing season brings higher standard deductions, expanded SALT relief, and brand‑new deductions for car loan interest, tips, and overtime pay. For many households, this means new opportunities to reduce taxable income. Careful planning in 2025—especially around retirement contributions, itemized deductions, and documentation of new deduction categories—can make a meaningful difference when you file.
For official details, see the IRS’s One Big Beautiful Bill provisions page.
At Lattice Group, we help clients navigate these updates with clarity and confidence. Whether you’re filing as an individual or managing more complex financial situations, thoughtful planning today sets you up for success tomorrow.
