What to Know About Major Tax Changes as Americans Begin Filing Returns

As Americans begin receiving their W-2s and 1099s, many are discovering that this year’s tax filing season looks different than before. New federal tax changes are adding complexity for filers trying to determine whether they will receive a refund or owe money.

The changes stem from a sweeping tax package signed into law by President Donald Trump, often referred to as the “One Big Beautiful Bill.” The legislation introduced several updates that taxpayers should understand before filing.

One of the most notable changes is an increase in the standard deduction. For single filers, the standard deduction has risen from $15,000 to $15,750 for the 2025 tax year. For married couples filing jointly, the standard deduction is now $31,500.

Another major update involves the SALT deduction, which refers to state and local taxes. Under previous law, taxpayers were capped at deducting $10,000. Under the new rules, that cap can range from $10,000 to as much as $40,000 in 2025, depending on a filer’s adjusted gross income.

However, tax professionals caution that the higher cap may not benefit everyone. John Karp, an accountant with Whitley Penn, says taxpayers must first exceed the standard deduction threshold before itemized deductions, including SALT, come into play. If itemized deductions do not exceed the standard deduction, the expanded SALT cap may not make a difference.

Another significant change impacts service industry workers. The new law eliminates federal taxes on tips, though there are limitations. The exemption is capped at $25,000 per tax return. For married couples filing jointly, the $25,000 cap applies to the household, not each individual.

Experts say these changes make it more important than ever for taxpayers to review their situation carefully or consult a tax professional before filing.

Reporting from Washington by Brian Abel.

Explore: NBCPalmSprings.com, where we are connecting the Valley.