Tax updates and news from the IRS
Here are the latest IRS tax updates and news as of May 27, 2025:
🧾 2025 Tax Year Inflation Adjustments
The IRS has announced inflation adjustments for the 2025 tax year, impacting over 60 tax provisions. Notable changes include:
- Standard Deduction Increases:
- Single filers: $15,000 (up $400)
- Married filing jointly: $30,000 (up $800)
- Heads of household: $22,500 (up $600)
- Tax Bracket Thresholds: Adjusted upward to reflect inflation, with the top 37% rate applying to incomes over $626,350 for single filers.
These adjustments will apply to returns filed in 2026.
💸 Proposed ‘No Tax on Tips’ Legislation
The U.S. Senate has unanimously passed the “No Tax on Tips Act,” aiming to provide tax relief for tipped workers:
- Key Provisions:
- Tax deduction of up to $25,000 for reported cash tips.
- Applicable to individuals earning up to $160,000 annually.
- Excludes non-cash tips and applies to tips received starting in the 2025 tax year.
The bill now moves to the House for consideration.
💳 Transition to Digital Refunds
Starting September 30, 2025, the U.S. Treasury will cease issuing paper checks for federal tax refunds:
- Digital Payment Methods:
- Direct deposit
- Prepaid debit cards
- Digital wallets
Taxpayers expecting paper refund checks should update their payment methods to avoid delays.
🌐 Enhanced IRS Online Services
The IRS continues to expand its online tools and services:
- Direct File Program: Available in 25 states, allowing eligible taxpayers to file returns directly with the IRS.
- IRS Online Account: Provides taxpayers with access to their tax information, payment history, and more.
These enhancements aim to streamline the tax filing process and improve taxpayer experience.
📅 Upcoming Tax Deadlines
- June 16, 2025: Deadline for U.S. taxpayers living and working abroad to file their 2024 federal income tax return and pay any tax due.
- May 1, 2025: Extended deadline for disaster victims in twelve states to file and pay their 2024 taxes.
