TULSA, Okla. — Tax season is in full swing, and this year brings significant changes that could put more money back in your pocket.
Five deductions are available for 2025 federal tax returns, and unlike many traditional deductions, most don't require itemizing.
2 News spoke with Mark Steber, Chief Tax Information Officer for Jackson Hewitt Tax Services, who emphasized the importance of understanding these changes for 2025 federal tax returns.
"You really need to pay attention this year. There's a lot to watch, and if you miss it, you might get a smaller refund than you deserve," Steber said.
New overtime deduction worth up to $12,500
Workers who earned overtime pay in 2025 can now claim a brand new deduction of up to $12,500. This deduction doesn't require itemizing and applies to the standard deduction process.
Tips deduction reaches $25,000
If you earned tips as part of your job in 2025, you can deduct up to $25,000. Like the overtime deduction, this doesn't require itemizing but must be included on your return.
Senior deduction provides $6,000 per person
Taxpayers who were 65 or older on December 31, 2025, qualify for a new $6,000 deduction per person. For married couples where both spouses are 65 or older, this means a combined $12,000 deduction.
"It's not for the rich, it's for regular taxpayers," Steber said.
The deduction has income phase-out limits for higher earners, but most middle-income seniors will qualify for the full amount.
Auto loan interest deduction up to $10,000
A completely new deduction allows taxpayers to deduct up to $10,000 in auto loan interest for certain American-assembled vehicles purchased in 2025. This deduction only applies to interest paid during the tax year, with the remaining interest eligible for future returns.
"This is a brand new deduction, never before existed. There's a new form, the new 1-A, there's a new line on your tax return, but again it's different than the old - you had to itemize in the olden days in order to take your mortgage deduction. You do not have to do this for the auto loan deduction," Steber said.
The deduction continues for each year you pay interest on qualifying loans through 2027, when the provision is set to expire.
Enhanced child tax credit increases to $2,200
The child tax credit has increased to $2,200 per child for 2025. This refundable credit can provide significant savings for families, especially those with multiple children.
Critical requirement: You must claim these deductions
Perhaps most importantly, none of these deductions are automatic. Taxpayers must actively include them on their returns to receive the benefits.
"This is not automatic. You leave it off, the IRS is not just gonna send you additional money," Steber said.
Most of these new deductions have a three-year lifespan, covering tax years 2025, 2026, and 2027, before Congress will review them again.
Tax professionals recommend gathering all necessary documentation early in the season and consulting with a tax preparer to ensure you don't miss any eligible deductions. The January 31 deadline for employers to provide tax documents has passed, so most taxpayers should have received their W-2s and 1099 forms.
If you're missing any tax documents, contact the issuing organization immediately, as the IRS likely received copies even if you didn't.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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