Understanding the available tax breaks can significantly ease the burden on your 2025 return. As tax laws evolve, staying informed about the latest deductions and credits is crucial for maximizing your refund or minimizing your liability. Whether you’re a seasoned taxpayer or filing for the first time, knowing which tax breaks apply to your situation can make a substantial difference. From education credits to energy-efficient home improvements, the landscape of tax benefits is vast and varied.
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The most popular tax deduction is the standard deduction. It’s available for filers who don’t itemize deductions and, for most filers, taking the standard deduction reduces taxable income more than itemizing would.
Each year, the IRS adjusts the size of the standard deduction for inflation. The exact amount is determined by filing status. For tax year 2025, the standard deduction for single filers and married people filing separately is $15,000 ($14,600 in 2024). Married taxpayers filing jointly can deduct $30,000 ($29,200 in 2024). Heads of household get a $22,500 standard deduction ($21,900 in 2023).
Deductions for Filers Who Itemize
For most taxpayers, taking the standard deduction saves more than itemizing. However, some taxpayers still itemize. For those filers, mortgage interest, medical expenses and state and local taxes provide some of the best breaks.
If you took out a home loan after Dec. 15, 2017, you can deduct mortgage interest paid during 2025 on up to $750,000 of the loan. A married person filing separately can only deduct interest on the first $375,000 of the loan. If your mortgage is from before Dec. 15, 2017, the limit is $1 million, or $500,000 for married filing separately. These limitations were set to expire in 2025 when provisions of the Tax Cuts and Jobs Act expired, but there is talk of an extension at the time of writing.
You may also be able to deduct outlays for medical care, including money spent on doctor visits, prescriptions, x-rays, eyeglasses and other health needs. You can only deduct amounts over 7.5% of your adjusted gross income, however. State and local tax deductions can be a boon for residents of high-tax states. Filers can deduct up to $10,000 for payments made for property and either income or sales taxes.
Other Tax Breaks for Your 2025 Return
Each year the IRS adjusts tax brackets to account for inflation. The marginal rates charged for the seven brackets, ranging from 10% to 37%, are unchanged. But the income levels required to move into a higher bracket increase. This amounts to a break for people whose income would otherwise move them into a higher tax bracket.
2025 Federal Tax Brackets
| Rate | Single | Married Filing Jointly | Married Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 | $0 – $11,600 | $0 – $17,000 |
| 12% | $11,925 – $48,475 | $23,850 – $96,950 | $11,600 – $47,150 | $17,000 – $64,850 |
| 22% | $48,475 – $103,350 | $96,950 – $206,700 | $47,150 – $100,525 | $64,850 – $103,350 |
| 24% | $103,350 – $197,300 | $206,700 – $394,600 | $100,525 – $191,950 | $103,350 – $197,300 |
| 32% | $197,300 – $250,525 | $394,600 – $501,050 | $191,950 – $243,725 | $197,300 – $250,500 |
| 35% | $250,525 – $626,350 | $501,050 – $751,600 | $231,251 – $365,600 | $250,500 – $626,350 |
| 37% | $626,350+ | $751,600+ | $365,600+ | $626,350+ |
Taxpayers with children or other dependents under age 17 can likely get the child tax credit. This credit was temporarily expanded up to $3,600 in 2021, but it has since reverted to $2,000. The credit reduces your tax bill directly by up to $1,400 per dependent, based on your income.
Other tax breaks include the earned income tax credit, which can be worth up to $8,046 (up from $7,830 in 2024) depending on filing status, number of children and earned income.
Other tax breaks that were increased during the year to account for inflation include higher income levels for phasing out IRA contributions and higher thresholds for capital gains taxes. The size of an estate that is exempt from federal estate and gift taxes rose from $13.99 million in 2025 from $13.61 in 2024.
Bottom Line
As tax season approaches each year, it’s important to keep various tax breaks in mind to ensure you limit your tax liability as best as possible. In 2025, popular tax breaks like the standard deduction and earned income tax credit increased while other tax breaks remained static. The marginal tax rates remain the same, although the tax brackets were adjusted for inflation, as they are every year.
Tax Planning Tips for Beginners
- To make sure you don’t pay more taxes than necessary, consider hiring a financial advisor who specializes in taxes. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Taxpayers who don’t itemize may still be able to take some deductions using the Schedule 1 form. These include self-employment taxes, contributions to IRAs and health savings accounts, interest on student loans, expenses incurred by teachers and alimony.
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