CHICAGO (WLS) — Mark your calendars, as tax season officially kicks off on Monday, January 26.
This year, taxpayers will experience some notable changes introduced by President Donald Trump’s renowned “Big Beautiful Bill.”
Key updates include the elimination of taxes on tips and overtime, the introduction of a deduction for interest on certain car loans, and an increase in the standard deduction amount.
For the current tax filing period, married couples can claim a standard deduction of $31,500, while individuals are eligible for $15,750.
“The standard deduction is a foundational deduction available to all taxpayers filing returns,” explained Mark Gallegos, a partner at Porte Brown Accountants and Advisors. “You’re allowed to take either the standard deduction or itemize deductions, whichever is greater. Since most Americans opt for the standard deduction, its increase is beneficial.”
Gallegos views these changes as a significant opportunity for tax savings. Addressing the so-called tax-free tips, he clarified: “If you earn tips, such as those received by servers, you still need to pay taxes on them as usual. However, there’s now a tip deduction available. If you qualify, you could deduct up to $25,000 of your tip income.”
Gallegos said this year your W-2 will not be updated: “So, it’s going to be harder, so it’s more important to keep those records, those logs, what you’ve received in order to give your tax preparer that information.”
People who bought a new car last year, might be able to take a deduction for some of the interest they’ll pay if they took out a loan.
“You can get up to $10,000 of the interest you’re paying on that as a deduction. Now, that car has to be assembled in the U.S. Also, you’re going to have to report the VIN number of that car when you file your tax returns so it lines up.”
He says leased vehicles to not qualify.
Gallegos urges people to get organized early, file early and file electronically.
If you do so and if you use direct deposit you could have your refund in about 21 days.
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