Tax Season 2025: Key Tax Changes and New Deductions You Need to Know

Written By

Ryan Dinyer

Tax season is here, and with it comes the usual pile of paperwork, forms, and questions. But before you file, it’s worth taking a moment to understand what’s new this year. Tax rules change more often than many people realize, and even small updates can affect your refund, your owed balance, or your eligibility for key deductions.

Whether you’re filing on your own or using a tax pro, here are the most important updates for 2025 tax season—so you can file with confidence and avoid leaving money on the table.

1. New Income Tax Brackets for 2024 (Filed in 2025)

Every year, the IRS adjusts income tax brackets to keep up with inflation. For 2024 income (which you report in 2025), those brackets have shifted slightly upward. That means you might pay a little less in taxes even if your income hasn’t changed.

Here’s a simplified look at the new 2024 tax brackets for single filers:

10%: Up to $11,600
12%: $11,601 – $47,150
22%: $47,151 – $100,525
24%: $100,526 – $191,950
32%: $191,951 – $243,725
35%: $243,726 – $609,350
37%: Over $609,350

Married couples filing jointly and heads of household have their own adjusted brackets, too. These changes are routine, but they can slightly lower your tax bill by moving more of your income into lower brackets.

Tip: If your income rose in 2024, double-check whether you’ve moved into a new bracket. It could affect your overall tax rate.

2. Standard Deduction Got a Boost

The standard deduction is the flat amount you can subtract from your income before calculating your taxes. Most people take this deduction instead of itemizing, and in 2024, it went up again.

Here are the new standard deduction amounts:

Single filers: $14,600 (up from $13,850 in 2023)
Married filing jointly: $29,200 (up from $27,700)
Head of household: $21,900 (up from $20,800)

This increase means you’ll automatically shield more of your income from taxes, even if you don’t track expenses for deductions like mortgage interest or medical bills.

Tip: If you’re close to the itemizing threshold, compare both options to see which gives you a better tax outcome.

3. Child Tax Credit: Still in Limbo

The Child Tax Credit was temporarily expanded during the pandemic, then reduced in 2022. As of tax year 2024, it remains at $2,000 per child under 17, with up to $1,600 refundable if your tax liability is low.

There’s been talk in Congress about increasing the credit or making it fully refundable again, but no new laws have passed yet. Keep an eye on the IRS website or check with your tax preparer for any late updates, especially if you have young kids.

Tip: If your income is below $200,000 (single) or $400,000 (married filing jointly), you likely qualify for the full credit.

4. Education Credits Are Still Available

If you paid tuition in 2024, you may qualify for one of two valuable tax credits:

The American Opportunity Credit, worth up to $2,500 per student for undergrad expenses
The Lifetime Learning Credit, worth up to $2,000 for any post-secondary education (including grad school or job training)

Both credits phase out at higher income levels, but they can significantly reduce your tax bill or boost your refund.

Tip: Make sure to get Form 1098-T from your school. This shows what you paid and helps you claim the credit accurately.

5. No More Above-the-Line Charitable Deduction

During the pandemic, the IRS allowed taxpayers to deduct up to $300 in charitable donations—even if they didn’t itemize. That special rule is no longer in place for 2024 returns.

Now, if you want to deduct charitable contributions, you’ll need to itemize your deductions, which may not be worth it for everyone given the higher standard deduction.

Tip: Consider bunching charitable gifts into one tax year to cross the itemizing threshold and maximize your tax benefit.

6. Healthcare Marketplace Subsidies Still Apply

If you bought health insurance through the federal or state marketplace, you may qualify for premium tax credits. These credits were expanded during the pandemic, and the enhanced subsidy rules have been extended through 2025.

That means more people qualify for help—even those with higher incomes. But if you got advance payments of the credit, you’ll need to reconcile that amount when you file your taxes.

Tip: Use Form 1095-A (sent by your marketplace provider) to complete Form 8962 and avoid repayment surprises.

7. Retirement Contributions Are More Generous

The IRS raised the limits for how much you can contribute to retirement accounts in 2024:

401(k) contributions: Up to $23,000 (plus $7,500 if you’re 50 or older)
IRA contributions: Up to $7,000 (plus $1,000 catch-up for 50+)

Even though these aren’t direct tax deductions unless you made traditional contributions, they help lower your taxable income and build long-term wealth.

Tip: If you made IRA contributions before the April 15, 2025 deadline, you can still apply them to your 2024 return.

8. Energy Credits for Homeowners Are Back

If you made energy-efficient improvements to your home in 2024, you may qualify for valuable tax credits under the Inflation Reduction Act. The Energy Efficient Home Improvement Credit lets you claim up to $1,200 for qualifying upgrades like insulation, windows, or heat pumps.

There’s also a Residential Clean Energy Credit, which covers 30% of the cost of installing solar panels, battery storage, or geothermal systems.

Tip: Save all receipts and documentation. These credits aren’t refundable, but they can help lower what you owe.

9. Freelancers and Side Hustlers: Be Ready for 1099-K Confusion

The IRS has once again delayed full enforcement of new 1099-K rules, which were originally set to trigger for anyone receiving over $600 through third-party payment apps like Venmo, PayPal, or Cash App.

For tax year 2024, platforms are required to send a 1099-K only if you received over $5,000 in business-related transactions. But even if you don’t get a form, you’re still expected to report all income.

Tip: Keep clean records if you do freelance work, sell items online, or run a side hustle. Separate business and personal transactions to avoid headaches.

10. Filing Deadline and Other Logistics

This year, the IRS filing deadline for most taxpayers is Monday, April 15, 2025. Residents of Maine and Massachusetts get an extra two days, with a deadline of April 17 due to state holidays.

Electronic filing opens in late January, and the IRS recommends filing early—especially if you expect a refund or want to avoid identity theft risks.

Tip: Use direct deposit for faster refunds, and double-check your banking info. One typo can delay your refund for weeks.

Final Thoughts: What to Do Now

Taxes don’t have to be painful, especially if you go in prepared. The most important thing is staying up to date with what’s changed and knowing which deductions, credits, and rules apply to you.

Before you file this year:

Gather your W-2s, 1099s, and other income forms
Review any potential deductions, especially around education, retirement, or energy improvements
Decide whether to itemize or take the standard deduction
Check your eligibility for credits like the Child Tax Credit or education credits
File early if you can, especially if you’re expecting a refund

And if anything’s unclear, don’t hesitate to work with a tax pro—especially if you had major life changes like marriage, a new job, or buying a home.

Filing accurately means keeping more of your money—and avoiding problems later on.