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I promise I won’t bore you with tax posts every week. However, I know folks are gearing up to file soon, and I wanted to make sure to include some changes you should know about so you can hopefully save yourself some money!
The One Big Beautiful Bill Act (yes, that's its real name) is a new law that updates many of the credits and deductions available to American taxpayers.
Let's break it down in plain English.
💸 The Big One: Child Tax Credit Goes Up
If you have kids under 17, listen up. The Child Tax Credit got a bit of a bump:
2024: $2,000 per qualifying child
2025: $2,200 per qualifying child
Even better: More of the credit is now refundable, meaning you could get money back even if your tax bill hits zero
📦 Standard Deduction: Bigger Numbers, Less Math
The standard deduction went up again (inflation doing something useful for once):
Filing Status | 2024 | 2025 |
|---|---|---|
Single | $14,600 | $15,750 |
Head of Household | $21,900 | $23,625 |
Married Filing Jointly | $29,200 | $31,500 |
Most families take the standard deduction, so this directly shrinks the income you're taxed on. And by most, I mean more than 90% of taxpayers use the standard deduction.
🆕 Brand New Deductions You Didn't Have Last Year
Here's where it gets interesting. The OBBBA created several new deductions that stack on top of your standard deduction.
No Tax on Tips: If someone in your household earns tip income, up to $25,000 of those tips can now be deducted. (Note: still subject to payroll tax, but still.)
No Tax on Overtime: Overtime workers can deduct up to $12,500 (single) or $25,000 (married filing jointly) of qualifying overtime pay.
Senior Bonus Deduction: Age 65+ filers can claim an extra $6,000 deduction (single) or $12,000 (married). I’m so happy for the Baby Boomers who really never got any breaks or help (**sarcasm**…I love you Mom and Dad, please don’t be mad!)
Income limits apply to all of these, so check with your tax preparer if you're in a higher bracket.
👶 Adopting a Child? Big Change Here
The Adoption Credit got a major upgrade:
Up to $5,000 is now refundable (previously, you could only use it to offset taxes owed; if you didn't owe enough, you lost the benefit)
This makes it significantly more useful for families earlier in the adoption process
📚 529 Plans: More Ways to Spend the Money
If you've been saving in a 529 for your kids' education, the rules just got more flexible:
You can now use up to $20,000 annually for a broader list of K-12 expenses
College expense coverage has also expanded under the new rules
📱 Got a 1099-K? Here's What Happened
Sold stuff on eBay? Got paid via Venmo for that side hustle? The 1099-K reporting threshold has been reset to $20,000 and 200+ transactions for 2025. So fewer families will get surprise tax forms this year for casual online selling. Remember, income is income regardless of whether you receive a form or not.
📅 Important Dates to Not Forget
Tax filing deadline: April 15, 2026
Extension deadline (if needed): October 15, 2026
Pro tip: File early to avoid identity theft headaches and get your refund faster
TL;DR for Family Taxes
2025 is actually a pretty good tax year if you know what to look for. The highlights:
Child Tax Credit is higher: $2,200 per kid under 17
Standard deductions are up: less taxable income across the board
New deductions for tips and overtime: huge for hourly and service workers
529s are more flexible: easier to use your education savings
Adoption Credit is more refundable: better for more families
As always, your situation is unique, and a tax professional can make sure you're not leaving anything on the table. But knowing what changed is half the battle, and now you do! Anything I’ve written here today is not tax or legal advice and is for information purposes only. Got it!? Good!
Until next time, friends,
-Catie