The new 2025 deductions, line by line

Schedule 1-A (Form 1040), Additional Deductions, is a new form for tax year 2025 that gathers four deductions created by the 2025 law: no tax on tips, no tax on overtime, car loan interest, and an enhanced deduction for seniors. You figure each one, add them in Part VI, and the total carries to Form 1040, line 13b. You can claim them whether you take the standard deduction or itemize, but each has a dollar cap and an income-based phaseout.

Four, all new for 2025: a deduction for qualified tips, a deduction for qualified overtime pay, a deduction for interest on a qualifying car loan, and an extra deduction for taxpayers who are 65 or older. Each has its own cap and its own MAGI phaseout threshold. They're kept together on this one schedule so the pieces don't get scattered across the return, and they don't overlap with itemized deductions on Schedule A.

No, and that's the biggest draw. All four are claimed on Schedule 1-A on top of either the standard deduction or your itemized deductions, so you don't have to itemize to get them. A worker who takes the standard deduction still claims the full tips or overtime deduction they qualify for. The decision to itemize on Schedule A is a completely separate calculation that doesn't affect these four.

For 2025 you can deduct up to $25,000 of qualified tips, and the cap is the same whether you're single or married filing jointly. The deduction starts to phase out once your modified AGI passes $150,000, or $300,000 on a joint return, dropping by $100 for every $1,000 of income above the threshold. A single filer's deduction is fully gone by about $400,000 of MAGI. Married taxpayers generally have to file jointly to claim it.

Voluntary tips you receive in an occupation that customarily and regularly received tips, and that are reported, whether on a W-2, a 1099, or Form 4137. Cash and card tips both count. What doesn't count is a mandatory service charge or an automatic gratuity, like an 18 percent charge added to a large party, because those are treated as wages, not tips. And even when the income tax deduction applies, tips still owe Social Security and Medicare tax.

You can deduct the premium part of your overtime, the extra pay above your regular rate, up to $12,500, or $25,000 on a joint return. The key word is premium: if you're paid time-and-a-half, only the extra half is deductible, not the whole overtime check. It's the federal overtime premium under the Fair Labor Standards Act that counts, not overtime paid only under a state law or a contract. The deduction phases out above $150,000 of MAGI, or $300,000 joint.

You can deduct up to $10,000 of interest for 2025 on a loan used to buy a qualifying vehicle. The vehicle has to be new, have its final assembly in the United States, and be for personal use, and the loan has to be taken out after December 31, 2024, secured by the car as a first lien. You report the VIN on the form. Leases, used cars, and foreign-assembled vehicles don't qualify. The deduction phases out fast above $100,000 of MAGI, or $200,000 joint, at $200 per $1,000.

It's an extra $6,000 deduction for each taxpayer who is 65 or older, up to $12,000 on a joint return where both spouses qualify. It sits on top of both the standard deduction and the existing additional standard deduction for being 65 or older, so it's a third layer, not a replacement. You have to have been born before January 2, 1961 to qualify for 2025, and it phases out at 6 percent of MAGI over $75,000, or $150,000 joint. Married filers generally must file jointly to claim it.

Each deduction has its own modified AGI phaseout. Tips and overtime start phasing out at $150,000 single or $300,000 joint, at $100 of lost deduction per $1,000 of income over the line. Car loan interest starts at $100,000 single or $200,000 joint, but fades twice as fast at $200 per $1,000. The senior deduction starts at $75,000 single or $150,000 joint and drops by 6 percent of the excess. Higher earners get a reduced deduction, or none at all.

No. The total from Schedule 1-A lands on Form 1040, line 13b, which sits below the adjusted gross income line, so it lowers the taxable income your tax is figured on but leaves your AGI unchanged. That distinction matters, because a lot of other tax breaks, credits, and phaseouts key off AGI. They'll look at the AGI above these deductions, not the lower taxable income after them, so claiming Schedule 1-A won't help you qualify for AGI-based benefits.

Mostly no. For the tips, car loan interest, and senior deductions, married taxpayers generally have to file a joint return to claim them, so married filing separately loses those three. Overtime is the one exception where married filing separately is allowed. Each person claiming a deduction also needs a valid Social Security number. If you're married and want the tips, car, or senior deductions, filing jointly is usually the way to keep them.

The total from Part VI carries to Form 1040, line 13b. That line is below your adjusted gross income, so the deduction reduces your taxable income on top of the standard deduction or your itemized deductions. If you're a senior filing Form 1040-SR, the senior deduction still flows through Schedule 1-A the same way. Because line 13b comes after AGI, these deductions don't change your AGI or the tax breaks that depend on it.

No. The generator helps you fill out and produce a completed Schedule 1-A that you can review, attach to your Form 1040, and file, or use to estimate your deduction before entering it elsewhere. It doesn't transmit anything to the IRS, it doesn't confirm whether your tips, overtime, or vehicle actually qualify, and it isn't tax advice. You're responsible for the accuracy of your figures and for keeping the pay stubs, tip logs, and loan records behind them.