01/12/2026
2025 Tax Season Quick Update!
1. No Tax on Overtime - Workers are eligible to receive a maximum annual deduction of $12,500 ($25,000 for joint filers), although the deduction is only for the "half" portion of "time and a half" compensation. Please make sure your employer provides you with your overtime documentation if it is not specifically stated on your W2.
2. No Tax on Tips - Workers are eligible to receive a maximum deduction of $25,000. Individuals who receive a w2 or 1099 are both eligible. Please see examples in the link on the post below.
3. No Tax on Car Loan Interest - individuals may deduct interest paid on a loan used to purchase a qualified vehicle based on the following: (Please provide your VIN to your tax preparer)
A. originated after December 31, 2024,
B. used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify),
C. for a personal use vehicle (not for business or commercial use)
D. secured by a lien on the vehicles.
4. Deduction for Seniors - Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000 in addition to the current standard deduction.
Further information and examples can be found here.
https://www.irs.gov/newsroom/treasury-irs-provide-guidance-for-individuals-who-received-tips-or-overtime-during-tax-year-2025
