Proposed federal tax legislation, referred to informally as the “One Big Beautiful Bill,” includes changes that, if enacted, would significantly affect business and personal income taxes and payroll W-2 reporting. The following reflects key provisions under that proposal. Legislative status is subject to change; please consult your tax adviser regarding the current state of the law.
Tips and overtime income - If you have W2 tip income or overtime income, there should be data in W2 Box 14 or a supplemental notice from the employer regarding qualifying amounts related to these 2 specific items:
Tips - deduction of up to $25,000 per taxpayer with phaseout for Modified Adjusted Gross Income (MAGI) over $150,000 (over $300,000 for Married Filing Jointly).
Working overtime - deduction of up to $12,500 per taxpayer with phaseout for MAGI over $150,000 (over $300,000 for Married Filing Jointly).
Social Security recipients - There is an additional $6,000 per-person senior Social Security deduction for 2025 – 2028 for those age 65 and older, with a phaseout for MAGI over $75,000 (over $150,000 for Married Filing Jointly). For those receiving Social Security, this is a favorable change that may help reduce income taxes.
Child Tax Credit - The child tax credit increases to $ 2,200 for dependents under age 17. Over 17 remains at $500.
529 plans - 529 plan tax considerations have been modified; reach out to a financial or tax professional for clarification.
State and Local Tax (SALT) - The Schedule A SALT cap deduction increases to $40K – the combined property tax and state income taxes that can apply toward itemized deductions. There may be other miscellaneous deductions includable depending on your situation.
New vehicle deduction – A qualifying new vehicle deduction of $10,000 for interest paid on a loan for a new vehicle assembled in the United States and purchased in 2025 may apply. The bill of sale will be required, along with documentation of the interest paid.
Cryptocurrency/digital assets – Investors must report selling or using digital assets to pay for a transaction. These asset sales have always been taxable; however, include the form for filing 2025 taxes.
Home Energy Efficiency - Energy efficiency home improvement credits end in 2025. If a new furnace, A/C, boiler, heat pump, water heater, woodstove, windows, doors, insulation, solar, or battery storage was installed, provide a copy of the invoice for filing purposes.
Required forms for filing
Below are some of the documents that may be needed to file 2025 income taxes, depending on one's situation:
- W-2 for wages
- 1099-Int for interest
- 1099-DIV for dividends
- 1099-B Brokerage
- SSA-1099 Social Security
- 1099-NEC for income
- 1099-Misc for income
- 1099-K for income
- 1099-R for retirement income
- 1099-G for refunds & unemployment
- 1099-Int for mortgages
- 1098-T for tuition
- 1099-SA for HSAs
- K-1 forms from investments in S corporations or partnerships
- Form 5498 for IRA values
- Form 1098-VLI for new car loan interest
- For 1099-DA for digital assets
- IRA and Roth IRA contributions for 2025
- Childcare costs, and the name, address, amount, and Tax ID # of the recipient
- Charitable donations: total amounts and recipients
- Property tax paid on primary residence
- Estimated tax payments and dates
- Any letters received from the IRS or state tax authorities
The IRS officially began accepting 2026 tax season returns on Monday, January 26, 2026, with the filing deadline of Wednesday, April 15, 2026. If you have any questions regarding investments, securities, purchases, or deductions specific to your situation, contact a financial or tax professional for further information before filing.