OBBBA -Key 2025 Form 1040 Changes You Need to Know

This guide breaks down the eight (8) biggest Form 1040 changes, in simple terms, so you can prepare for tax season with confidence.

The standard deduction has increased for all filing statuses in 2025. Single filers now get $15,750 (up from $15,000), married couples filing jointly receive $31,500 (up from $30,000), and heads of household get $23,625 (up from $22,500).

What this means for you: A higher standard deduction means less of your income is taxed. For example, a married couple will pay tax on $1,500 less income than before, potentially saving hundreds of dollars.

While the seven tax rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%) remain the same, the income ranges for each bracket have been adjusted for inflation. For example, the 22% tax bracket now applies to single filers with income between $48,475 and $103,350, up from the previous range.

What this means for you: These adjustments help prevent "bracket creep," where inflation pushes you into higher tax brackets. Many taxpayers may find themselves in a lower bracket than expected, potentially reducing their tax bill.

Taxpayers age 65 and older can now claim an additional deduction of up to $6,000 per person ($12,000 for married couples if both are 65+). This is on top of the standard deduction and existing age-related deductions. The benefit phases out for single filers with income over $75,000 and married couples with income over $150,000.

What this means for you: If you're 65 or older, this new deduction could significantly reduce your taxable income. For example, a single 65-year-old with income under $75,000 could have a total standard deduction of $23,750 ($15,750 standard + $2,000 existing senior + $6,000 new senior deduction).

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Workers who receive tips can now deduct up to $25,000 of their tip income. This deduction phases out for single filers with income over $150,000 and married couples with income over $300,000. You'll need to report this on the new Schedule 1-A.

What this means for you: If you work in a job where you receive tips (like restaurants, hotels, or salons), you could pay significantly less tax. For example, if you earned $15,000 in tips and are in the 22% tax bracket, you could save about $3,300 in taxes.