What changed for 2025 tax deductions

The standard deduction increased for 2025. For single filers, it rose to $14,600. For married couples filing jointly, it is $29,200. For heads of household, it is $21,900. These amounts are indexed annually for inflation, so they shift each year.

Beyond the standard deduction bump, most itemized deductions remain the same as 2024. The mortgage interest deduction, charitable contributions deduction, and state and local tax (SALT) deduction all work the way they did last year. The SALT deduction cap stays at $10,000 per year for married couples filing jointly and $5,000 for single filers.

The child tax credit did not change in amount — it remains $2,000 per may have access to child — but the income phase-out thresholds shifted slightly. If your income is near the limits, check whether you now fall within range.

Key Takeaways

  • The standard deduction for 2025 is $14,600 for single filers, $29,200 for married couples filing jointly, and $21,900 for heads of household.
  • Itemized deductions such as mortgage interest and charitable donations follow the same rules as 2024, but you must choose between itemizing or taking the standard deduction.
  • The SALT deduction remains capped at $10,000 per year for joint filers, limiting deductions for state income tax, property tax, and sales tax combined.
  • The child tax credit is still $2,000 per child, but income thresholds for claiming it shifted upward slightly in 2025.
  • Retirement account contributions — 401(k), IRA, and SEP-IRA limits — increased for 2025 and may lower your taxable income.

Standard deduction versus itemizing

You choose one or the other: take the standard deduction, or itemize your deductions. You cannot do both. Most people take the standard deduction because it is simpler and because their deductible expenses do not add up to more than the standard amount.

Itemizing makes sense if you own a home with a large mortgage, live in a high-tax state, made substantial charitable donations, or had significant medical expenses. Add up your mortgage interest, property taxes, state income taxes, charitable gifts, and medical costs above 7.5% of your adjusted gross income. If that total exceeds the standard deduction, itemizing saves you money.

The SALT cap complicates this math for high-income earners in expensive states. Even if you itemize, you can deduct only $10,000 in combined state income tax, property tax, and sales tax. This cap has been in place since 2017 and remains through 2025.

Retirement account contributions and deductions

Contributing to a traditional 401(k) or traditional IRA can lower your taxable income. For 2025, the 401(k) contribution limit is $24,500 for workers under 50, and $30,500 for workers 50 and older. These limits increased from 2024.

Traditional IRA contributions are deductible up to $7,000 per year for those under 50, and $8,000 for those 50 and older. The catch-up amount for those 50 and older also increased. However, if you or your spouse has access to a workplace retirement plan, your IRA deduction phases out at higher income levels, so check the income limits for your filing status.

Self-employed workers can deduct SEP-IRA contributions up to 25% of net self-employment income, with a 2025 limit of $70,000. Solo 401(k) contributions work similarly but allow higher total contributions. These deductions reduce your self-employment tax as well as income tax.

Mortgage interest and property tax deductions

If you itemize, you can deduct mortgage interest on loans up to $750,000 of principal (or $1 million if the loan originated before December 16, 2017). This applies to your primary residence and one other home. The deduction covers interest only, not principal payments.

Property taxes on your home are deductible as part of itemized deductions, but they count toward the $10,000 SALT cap. If you pay $8,000 in property tax and $3,000 in state income tax, you can deduct only $10,000 total, not $11,000. This cap affects homeowners in high-tax states most severely.

If you paid points to lower your mortgage interest rate, you may deduct them in the year you paid them, or spread the deduction over the life of the loan. Points paid by the seller on your behalf are also deductible in the year of purchase.

Charitable contribution deductions

Cash donations to may have access to charities are deductible if you itemize. The limit is generally 60% of your adjusted gross income. Non-cash donations — clothing, household items, vehicles — are deductible at fair market value, but you must have a receipt or written acknowledgment from the charity.

If you donate a vehicle, the deduction is usually the fair market value, though some charities will give you a receipt stating a lower amount if they sell the vehicle at auction. Keep that receipt; it is your proof of the deduction amount.

Donations to donor-advised funds (DAFs) are deductible in the year you contribute, even if the fund distributes the money to charities later. This strategy lets you bunch donations into a high-income year and spread the charitable giving across multiple years.

Medical and dental expense deductions

Medical and dental expenses are deductible only if you itemize, and only the amount above 7.5% of your adjusted gross income. If your AGI is $60,000 and you spent $8,000 on medical care, you can deduct only $3,500 ($8,000 minus $4,500, which is 7.5% of $60,000).

may have access to expenses include doctor visits, hospital stays, prescription medications, dental work, vision care, and hearing aids. They also include the cost of travel to receive medical care and health insurance premiums you pay yourself (not those deducted from your paycheck). Long-term care insurance premiums are deductible up to age-based limits.

Over-the-counter medications are no longer deductible unless prescribed by a doctor. Cosmetic procedures are not deductible, but reconstructive surgery following an accident or illness is.

Education-related deductions and credits

The student loan interest deduction lets you deduct up to $2,500 in interest paid on may have access to student loans, regardless of whether you itemize. This deduction phases out at higher income levels: it begins to disappear at $75,000 for single filers and $155,000 for married couples filing jointly.

The American Opportunity Tax Credit and the Lifetime Learning Credit are not deductions — they are credits, which reduce your tax dollar-for-dollar. The American Opportunity Credit is worth up to $2,500 per student per year for the first four years of college. The Lifetime Learning Credit is worth up to $2,000 per return per year for any post-secondary education or skill-building courses.

You cannot claim both credits for the same student in the same year, but you can claim one for each student in your household. These credits also phase out at higher incomes, so verify your may be able to access based on your modified adjusted gross income.

Business and self-employment deductions

If you are self-employed, you can deduct ordinary and necessary business expenses: office supplies, equipment, rent, utilities, insurance, and professional services. Home office deductions are available if you use part of your home exclusively for business. You can deduct either actual expenses (rent, utilities, insurance, repairs) or use the simplified method of $5 per square foot, up to 300 square feet.

Vehicle expenses are deductible using the standard mileage rate or actual expenses. For 2025, the standard mileage rate for business use is 70 cents per mile (rates vary by use category). Keep a mileage log to support the deduction.

Meals and entertainment are 50% deductible for business purposes, with some exceptions. Meals during travel away from home are 50% deductible. Meals provided to employees at the workplace are 50% deductible. Client entertainment is also 50% deductible, but you must have documentation showing the business purpose and attendees.

Frequently Asked Questions

Should I take the standard deduction or itemize?

Take whichever is larger. Add up your deductible expenses: mortgage interest, property taxes, state income taxes, charitable donations, and medical costs above 7.5% of your income. If that total exceeds $14,600 (single) or $29,200 (married filing jointly), itemize. Otherwise, take the standard deduction.

Can I deduct state income tax and property tax together?

Yes, but they count toward the $10,000 SALT cap combined. If you pay $7,000 in property tax and $4,000 in state income tax, you can deduct only $10,000 total, not $11,000. Sales tax also counts toward this cap if you choose to deduct it instead of state income tax.

What if I made a large charitable donation but did not itemize last year?

You cannot go back and claim it on a prior year return unless you file an amended return within three years. For 2025, if you plan to make large donations, consider whether itemizing makes sense. You can also bunch donations into one year using a donor-advised fund.

Are retirement account contributions deductible if I have a 401(k) at work?

401(k) contributions are deducted from your paycheck before taxes, so they are always deductible. Traditional IRA contributions are deductible only if your income is below the phase-out limit, which depends on whether you have access to a workplace plan. Check the IRS income limits for your filing status.

Can I deduct home office expenses if I work from home part-time?

Yes, if you use part of your home exclusively for business. You can deduct actual expenses (utilities, rent, insurance, repairs) proportional to the office space, or use the simplified method of $5 per square foot up to 300 square feet. Keep records showing the square footage and business use.