Tax updates and news from the IRS

Here are the latest IRS tax updates and news as of May 27, 2025:

The IRS has announced inflation adjustments for the 2025 tax year, impacting over 60 tax provisions. Notable changes include:

Standard Deduction Increases:
- Single filers: $15,000 (up $400)
- Married filing jointly: $30,000 (up $800)
- Heads of household: $22,500 (up $600)
Tax Bracket Thresholds: Adjusted upward to reflect inflation, with the top 37% rate applying to incomes over $626,350 for single filers.

These adjustments will apply to returns filed in 2026.

The U.S. Senate has unanimously passed the “No Tax on Tips Act,” aiming to provide tax relief for tipped workers:

Key Provisions:
- Tax deduction of up to $25,000 for reported cash tips.
- Applicable to individuals earning up to $160,000 annually.
- Excludes non-cash tips and applies to tips received starting in the 2025 tax year.

The bill now moves to the House for consideration.

Starting September 30, 2025, the U.S. Treasury will cease issuing paper checks for federal tax refunds:

Digital Payment Methods:
- Direct deposit
- Prepaid debit cards
- Digital wallets

Taxpayers expecting paper refund checks should update their payment methods to avoid delays.

The IRS continues to expand its online tools and services:

Direct File Program: Available in 25 states, allowing eligible taxpayers to file returns directly with the IRS.
IRS Online Account: Provides taxpayers with access to their tax information, payment history, and more.

These enhancements aim to streamline the tax filing process and improve taxpayer experience.

June 16, 2025: Deadline for U.S. taxpayers living and working abroad to file their 2024 federal income tax return and pay any tax due.
May 1, 2025: Extended deadline for disaster victims in twelve states to file and pay their 2024 taxes.