What You Need To Know for the 2025 Tax Season: Credits, Deductions, and Policies

Mark Durham | Jan 5, 2026

The 2025 tax season is approaching, so be prepared for any changes that could affect your return. As credits, deductions, and tax laws change frequently, it pays to plan ahead to get all the tax breaks you deserve and take advantage of deductions and credits you qualify to receive.

Standard Deduction Changes for 2025

Each year, the IRS adjusts the standard deduction to account for inflation. For the 2025 tax season, the standard deduction increased:

Single Filers: $15,750 (up from $14,600 in 2024)
Married Filing Jointly: $31,500 (up from $29,200 in 2024)
Head of Household: $23,625 (up from $21,900 in 2024)

If you don’t itemize deductions, the standard deduction lets you subtract this amount from your taxable income.

Key Tax Credits To Consider

Tax credits directly decrease your tax bill, which is a great way to lower your taxes. These are some important credits you should know about for the 2025 tax season:

Earned Income Tax Credit (EITC): As a tax credit available for those with a lower or moderate income, the EITC is a great help. The total credit per family of three or more children is $8,046 in 2025.
Child Tax Credit (CTC): The Child Tax Credit is still $2,000 per eligible child under 17 for the tax year 2025, up to $2,200 of which is refundable.
American Opportunity Tax Credit (AOTC): This tax credit is up to $2,500 per qualifying student during the first four years of college. Up to $1,000 of the credit is refundable.
Lifetime Learning Credit (LLC): The LLC offers up to $2,000 per return on qualified educational expenses, and the number of years you could get a credit is unlimited.

Tax Benefits To Save on Your Tax Return

The more deductions you have, the less you’ll owe in taxes. Some preliminary 2025 deductions include:

Retirement Funds: If you contribute to a retirement fund, such as a 401(k), IRA, or SEP IRA, it helps prepare for your retirement and may save you money. The contribution limits for 2025 are $23,500 in 401(k) accounts (or $31,000 if you are 50 or older) and $7,000 in IRA accounts (or $8,000 if you are 50 or older).
Medical Expenses: If you have a significant medical bill, medical expenses over 7.5% of your adjusted gross income (AGI) are tax-deductible.
Donations to Charities: You may still deduct cash or property donations you make to qualified charities if you itemize (for cash donations up to 60% of your AGI and up to 30% of your AGI for assets that have appreciated, such as stock), so retain receipts of all contributions.

New or Revised Policies for the Tax Year 2025

Every tax season, you might see new rules or modifications to the IRS forms. Here’s what’s new or different in 2025:

Energy Efficiency and Clean Energy Tax Credits: If you’ve retrofitted your house to save energy by installing solar panels or energy-efficient windows, you might qualify for a credit. The Residential Clean Energy Credit is still 30% for some improvements.
Tax Credit for Electric Vehicle (EV): Federal tax credits for new and used electric vehicles (EVs) expired after September 30, 2025.
Bonus Depreciation: 100% rate applies only if the property was acquired and placed in service after January 19, 2025. Property acquired on or before that date but placed in service in 2025 is subject to the former pahse-down rate of 40% bonus depreciation rate is 40%. Make sure you remember this when making big business purchases.

Try Professional Support for Difficult Cases

Suppose your financial picture is more complex (if you have a business, have multiple investments, or recently underwent a major life transition). In that case, a tax professional may help with your return because it is their job to be familiar with the most recent regulations. A tax professional may also inform you about deductions and credits you didn’t know existed.

Important Disclosures:

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #837373

Sources:

How to update withholding to account for tax law changes for 2025 | Internal Revenue Service

Earned Income Tax Credit: How It Works, Who Qualifies in 2025-2026 - NerdWallet

Child Tax Credit | Internal Revenue Service

Instructions for Form 8863 (2025) | Internal Revenue Service

Residential Clean Energy Credit | Internal Revenue Service

Clean vehicle tax credits | Internal Revenue Service

Additional First Year Depreciation Deduction (Bonus) - FAQ | Internal Revenue Service