The tax filing season that begins Monday marks the first since passage of the One Big Beautiful Bill Act, now known as the Working Family Tax Cuts, and taxpayers can expect stability as several important tax policies have been permanently extended. However, taxpayers may also be eligible to claim several new deductions, including those for tips, overtime, car loan interest, and seniors.
All told, the Working Family Tax Cuts will save the average taxpayer more than $3,700 this year.
“Taxpayers can rest a little easier knowing that key tax code provisions have been permanently extended,” National Taxpayers Union President Pete Sepp said. “This continuity will reduce complexity for filers and ease administrative burdens at the IRS.”
The tax cuts prevented a tax increase for nearly 80% of taxpayers by locking in the lower tax rates and higher standard deduction from the Tax Cuts and Jobs Act of 2017 that were due to expire at the end of 2025.
Newly created tax deductions targeted at working families were enacted retroactively, meaning that taxpayers can claim those deductions for all 2025 earnings. Schedule 1-A is the new form taxpayers must use to claim the deductions for tips, overtime, car loan interest, and the additional senior deduction.
Sepp also noted that small business and solopreneur tax filers have additional relief in store as well, including expanded eligibility for the 20% qualified business income deduction and more generous expensing for computers, cars, and other property used for a business.
“While the IRS will continue issuing guidance on these changes, taxpayers can feel confident in beginning the filing process,” Sepp said. “Maintaining detailed and accurate records will be essential to avoid delays and maximize tax refunds.”
Learn more about the Working Family Tax Cuts here.
National Taxpayers Union is the only free-market organization for taxpayers that unites effective advocacy with useful research about how to limit taxes, spending, and regulation at every level and branch of government—state, federal, administrative, and judicial.