TAX DAY:
April 15, 2026 |
We currently have a waiting list for the 2026 tax season.* *The 2026 tax season is for preparation of 2025 tax returns. We are currently accepting new clients on a limited basis. If you are interested in becoming a new client, please contact us to be added to our waiting list. |
CLIENT RESOURCES
January 15, 2026
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Significant Changes for Tax Year 2025:
- Income Tax Brackets: The marginal rates did not changed (10%, 12%, 22%, 24%, 32%, 35% and 37%) and were made permanent. In addition, the IRS adjusted the brackets (the income thresholds that are connected to these marginal rates) to account for inflation.
- The Standard Deduction increased for each filing status: Single or Married, Filing Separately - $15,750; Head of Household - $23,625; Married, Filing Jointly or Qualifying Widow(er) - $31,500.
- Taxpayers who are 65 and older qualify for an additional standard deduction: Single or Head of Household - $2,000; Married, Filing Separately or Jointly - $1,600 per eligible spouse.
- Taxpayers who are 65 and older qualify for a bonus deduction, which is effective for tax years 2025 to 2028: $6,000 per qualifying individual.
- Qualified Tips Deduction: Effective for tax years 2025 to 2028, eligible workers can deduct up to $25,000 of their qualified tip income annually. Eligible workers are those who work in an occupation that customarily and regularly receive tips. Deduction amounts are reduced when modified adjusted gross income exceeds $150,000 for single filers and $300,000 for married couples, filing jointly. Couples who file a separate return are not eligible for this deduction.
- Overtime Deduction: Effective for tax years 2025 to 2028, eligible W-2 employees can deduct the premium portion of their qualified overtime pay (the "half" portion of "time and a half"). Maximum deduction is $12,500 and $25,000 for Single and Married, Filing Jointly, respectively. Deduction amount is reduced when modified adjusted gross income exceeds $150,000 for single filers and $300,000 for married couples, filing jointly. Couples who file a separate return are not eligible for this deduction.
- New Vehicle Loan Interest Deduction: Effective for tax years 2025 to 2028, taxpayers may deduct up to $10,000 per year in interest paid on a loan used to purchase a brand-new vehicle for personal use. The vehicle's final assembly must have taken place in the US, and the loan must be secured by the vehicle. Deduction amount is reduced when modified adjusted gross income exceeds $100,000 for single filers and married couples, filing separately, and $200,000 for joint filers.
- The State and Local Tax (SALT) Deduction increased from $10,000 to $40,000 for taxpayers who itemize. This increase is effective for tax years 2025 to 2029. Full deduction up to $40,000 is allowed for modified adjusted gross income of $500,000 or less.
- The Child Tax Credit increased from $2,000 to $2,200 for 2025. The credit for other dependents remains at $500.
- IRA Contributions remain at $7,000.
- 2025 Mileage Rates: 70 cents/mile for business; 21 cents/mile for medical; 14 cents/mile for charity
- 1099-K Reporting: The threshold for reporting payments received through third-party companies increased. Taxpayers will not receive a 1099-K unless they received over $20,000 and more than 200 transactions. Taxpayers should still report all income received, even if receipts didn't trigger a form.
- Bonus Depreciation: Effective 2025, 100% first-year bonus depreciation has been made permanent. Businesses can deduct 100% of qualified business property purchased after January 19, 2025.
Michigan Retirement:
- Taxpayers born between January 1,1946 and December 31,1966: Qualify for a deduction of up to 75% of eligible retirement and pension income
- Taxpayers born before 1946: Continue to qualify for a full retirement/pension deduction