Hai Tax Services Inc

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• Publication 17: Individual Federal Income Tax (2025)

• 2025 

  • Tax Brackets

    • 37% for income over $626,350 (single) or $751,600 (married filing jointly)

    • 35% for income over $250,525 (single) or $501,050 (married filing jointly)

    • 32% for income over $197,300 (single) or $394,600 (married filing jointly)

    • 24% for income over $103,350 (single) or $206,700 (married filing jointly)

    • 22% for income over $48,475 (single) or $96,950 (married filing jointly)

    • 12% for income over $11,925 (single) or $23,850 (married filing jointly)

    • 10% for income up to $11,925 (single) or $23,850 (married filing jointly)

  • Standard Deduction: $15,750 for Single, $31,500 for Married Filing Jointly, and $23,625 for H.O.H.

• 2026​

  • Tax Brackets:

    • 37% for income over $640,600 (single) or $768,700 (married filing jointly)

    • 35% for income over $256,225 (single) or $512,450 (married filing jointly)

    • 32% for income over $201,775 (single) or $403,550 (married filing jointly)

    • 24% for income over $105,700 (single) or $211,400 (married filing jointly)

    • 22% for income over $50,400 (single) or $100,800 (married filing jointly)

    • 12% for income over $12,400 (single) or $24,800 (married filing jointly)

    • 10% for income up to $12,400 (single) or $24,800 (married filing jointly)

  • Standard Deduction: $16,100 for Single, $32,200 for Married Filing Jointly, and $24,150 for H.O.H

• SALT (State and Local Taxes) Deduction

  • State withholding on your W2, Property Taxes, and DMV Registrations​

  • Limit increased from $10,000 to $40,000

• Child Tax Credit & Other Dependent Credit (2025)​

  • $2,200 for children 16 and younger

  • $500 for any other dependents and children 17 and older

• Deduction for Seniors (age 65 and older)

  • Additional $6,000​

• No Tax on Tips (2025 - 2028)

  • ​Employees and self-employed individuals may deduct qualified tips they received in occupations the IRS identified as “customarily and regularly receiving tips”

  • Maximum Annual Deduction is $25,000

• ​No Tax on Overtime (2025 - 2028)

  • ​Individuals may deduct the portion of qualified overtime pay that exceeds their regular rate of pay (for example, the “half” portion of “time-and-a-half”)

  • Overtime must be reported on Form W-2, Form 1099, another statement furnished to the individual, or directly by the individual.

  • Maximum annual deduction is $12,500 ($25,000 for joint filers).

  • Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

• ​No Tax on Car Loan Interest (2025 - 2028)

  • Individuals may deduct interest paid on a loan used to purchase a qualified vehicle for personal use that meets other eligibility criteria. Lease payments do not qualify.

  • Maximum annual deduction is $10,000.

  • Phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).

    • What counts as qualified interest:​​

      • Originated after December 31, 2024

      • Was used to purchase a vehicle originally used by the taxpayer

      • Was secured by a lien on the vehicle

      • Was for a personal-use (nonbusiness) vehicle

• Trump Accounts for children

  • Parents, guardians, or others can establish a Trump Account for an eligible child.

  • Trump Accounts cannot be funded before July 4, 2026.

  • The federal government will make a one-time $1,000 contribution for each eligible child’s account, who is a U.S. citizen and who is born on or after Jan. 1, 2025, through Dec. 31, 2028.

  • Authorized contributions from individuals and employers are allowed up to $5,000 per year.

• Health Savings Account expansion for participants

• Home Energy Credit Expirations

  • Energy Efficient Home Improvement Credit (25C): Not allowed for any property placed in service after December 31, 2025.

  • Residential Clean Energy Credit (25D): Not allowed for any expenditures made after December 31, 2025.​

• EV Vehicle Tax Rebate Expiration

  • New & Used Clean Vehicle Credit (30D): Not allowed for any vehicle acquired after September 30, 2025​

• Earned Income Tax Credit

• Qualified Business Income: businesses will enjoy 20% deductions.

  • ​Single (phase-out begins at $197,300 - $247,300)​

  • Married (phase-out begins at $394,600 - $494,600)

• Others existing notable tax laws:​

  • Limit Mortgage Deductions to $750,000 Loan.

  • NO Personal and Dependents Exemptions Deductions (was $4,000 in 2017)

  • NO Child Tax Credit ($2000) for children with ITIN numbers.

  • NO Deduction for Home Equity Loan of Credit

  • NO Deductions for: Unions Dues, Uniforms, Tools, Travel, Work-Related Car expenses, Home Office Expenses.

  • NO Moving Expenses for work-related (unreimbursed) except for military personnel.

  • Insurance Coverage Mandate for State of California

    • Federal has eliminated healthcare mandate starting 2019; however, California residents will be required to have health insurance starting 2020.

    • Beginning in 2020, California will impose an individual health care mandate. Residents must obtain health care coverage, unless they qualify for an exemption. Those who fail to obtain coverage may owe a penalty on their California income tax returns.

    • California residents who do not have coverage for themselves and their dependents for each month in 2022, and who do not meet an exemption, will pay a penalty of $900/adult or more and $450/minor, or 2.5% of their or gross income over the filing threshold for their filing status, whichever is higher. The penalty for a married couple without coverage can be $1,6700 or more, and the penalty for a family of four with two dependent children could be $2,550 or more.