CHILD TAX CREDIT UPDATE
Starting in 2025, the Child Tax Credit will increase
- Child Tax Credit: 2024 vs. 2025
- 2024 Refundable portion capped at $1,400 per child
- 2025 Total Child Tax Credit increases to $2,200 per child
EDUCATOR EXPENSES
Eligible educators now include coaches, in addition to teachers and other school professionals
- Educators can deduct up to $300 of qualified expenses on Schedule 1.
- If you itemize deductions, additional qualified expenses may be deducted on Schedule A as a miscellaneous itemized deduction.
GAMBLING LOSSES (Professional Gamblers)
Starting with tax years beginning after December 31, 2025, professional gamblers may only deduct up to 90% of their gambling winnings as losses.
This means at least 10% of winnings will remain taxable, even if actual losses were higher.
IRA LIMIT INCREASE
See IR 2025-111
- The annual contribution limit for an Individual Retirement Account (IRA) has increased to $7,500, up from $7,000.
- This higher limit allows individuals to save more for retirement each year.
MISC INFORMATION REPORTING CHANGES (1099 FORMS)
- 1099-NEC and 1099-MISC
- The reporting threshold increases from $600 to $2,000.
- Payments below $2,000 generally will not require a 1099.
- 1099-K (Payment Apps & Online Marketplaces)
- Tax Year 2025
- Reporting required if total payments are $2,500, regardless of the number of transactions.
- Tax Year 2026
- Reporting required if payments are $25,000 or 200 or more transactions.
SALT DEDUCTION CAP (INCREASE)
(State and Local Taxes)
The limit on how much you can deduct for state and local taxes (SALT) is increasing temporarily from $10,000.
New deduction limits
- 2025: Up to $40,000
- 2026: Up to $40,400
- 2027–2029: The cap increases each year to 101% of the prior year’s limit
- After 2029: The cap returns to $10,000
Income Phase-Out Rules (MAGI)
The higher SALT deduction is reduced for higher-income taxpayers.
- 2025
- $500,000 – Single / Head of Household
- $250,000 – Married Filing Separately
- 2026
- $505,000 – Single / Head of Household
- $252,500 – Married Filing Separately
- 2027–2029
- Phase-out limits continue to increase to 101% of the prior year’s amount
📌 Once income exceeds these limits, the SALT deduction cap is reduced by 30%.
