Tax Tips: Taxpayers could see a change in their 2025 tax bill or refund
Taxpayers may see a reduction in their tax bill or an increase in refunds this year. The One, Big, Beautiful Bill makes several changes for this tax filing season.
New deductions have been added, and certain credits have been updated. Some of these changes are retroactive to the start of 2025, which suggests that taxpayers may not have adjusted their withholding or recalculated their estimated income tax obligations.
Key additions and changes that may affect taxable income or a refund
New deductions
• Seniors age 65 and older may be eligible to claim an additional deduction of up to $6,000. This is in addition to the current higher standard deduction for seniors under existing law.
• Tipped workers may be eligible to deduct up to $25,000 for qualified tips. This limit applies per return for single filers and married couples filing jointly.
• Individuals may be eligible to deduct up to $12,500; $25,000 for joint filers for qualified overtime.
• Individuals may deduct up to $10,000 in qualified passenger vehicle loan interest.
It’s important for taxpayers to know that each of these deductions phase out based on income level for individual and joint filers and have specific eligibility requirements.
Updates to credits
• A portion of the Adoption Credit is now refundable up to $5,000 per eligible child beginning in tax year 2025 and indexed for inflation annually.
o Indian Tribal governments are now recognized to have the ability to determine whether a child has special needs for purposes of the adoption tax credit.
• For taxpayers claiming the Child Tax Credit, they (or their spouse if filing jointly) and each qualifying child must have a Social Security number valid for employment and issued before the return’s due date, including extensions, to claim the CTC.
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Tax Tips: IRS Free File supports even more complex returns
There’s roughly one month remaining before the 2026 filing season concludes on April 15. For taxpayers who haven’t filed their federal income tax returns yet, they may be eligible to file for free. IRS Free File can support several different types of returns, from simple to complex ones that include credits, deductions or business expenses.
IRS Free File options
• IRS Free File tax preparation software is available to taxpayers with an adjusted gross income of $89,000 or less in 2025. The guided software will help them prepare and e-file their federal tax returns at no cost. Some partners may also offer free state tax return preparation and filing. Taxpayers can choose from 8 trusted partners and decide which is best for them.
• IRS Free File Fillable Forms is available to taxpayers with an AGI above $89,000 and feels comfortable preparing their own taxes. The forms are electronic versions of IRS paper forms. Instructions and publications are also available for use.
Credits and deductions
Eligible taxpayers using IRS Free File can still claim common and valuable tax credits, including the Earned Income Tax Credit, the Child Tax Credit and other refundable credits. Refundable tax credits can reduce the amount of tax owed or result in a refund, even if no tax is due.
Taxpayers choosing to use an IRS Free File option may also be able to deduct their business expenses, depending on tax limits and rules, even if they didn't receive a Form 1099-MISC, Form 1099-K, W-2 or other income statement.
Steps for using IRS Free File
• Visit IRS.gov/freefile — always go through the IRS.gov site to access the IRS Free File tax preparation software. It won’t come up if the taxpayer goes directly to a partner’s website.
• Choose an IRS Free File option: Guided tax software or Free File Fillable Forms.
o Guided tax software, choose an IRS Free File partner using the “Find your trusted partner” tool or the Browse All page. Each partner sets its own eligibility criteria (income, age, state residency). Once a selection is made, IRS sends the taxpayer directly to the partner’s website to create an account.
o Free File Fillable Forms, click the Free File Fillable Forms application to create an account.
• Once prepared and filed the taxpayer will receive a confirmation email when the IRS has accepted the return. If the return is rejected, in most cases corrections can be made and resubmitted electronically before the deadline.
IRS Free File works on computers, smart phones or tablets.
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Tax Tips: Taxpayer Bill of Rights: Taxpayers have the right to pay no more than the correct amount of tax
It’s filing season, so it’s a good time for the IRS to remind taxpayers they have 10 rights which make up the Taxpayer Bill of Rights. One of which ensures taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.
The right to pay no more than the correct amount of tax means taxpayers can:
• File for a refund if they believe they overpaid their taxes
• Contact the IRS if they believe there is an error on a notice or bill
• File an amended tax return if an error is discovered after the original return was filed
• Sign into IRS Online Account and request that any amount owed be removed if it exceeds the correct amount due
• Request that the IRS remove interest from the account if the agency caused unreasonable errors or delays
• Submit an offer in compromise to ask the IRS to accept less than the full amount of tax debt. Taxpayers do this if they believe all or part of the debt is not owed.
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