Year-End Personal Tax Check-In: What the New 2025 Tax Law Means for You

This time of year, most small business owners and professionals are wrapping up their books, reviewing payroll, and preparing for tax season. But your personal return deserves just as much attention, especially after the tax law changes introduced this summer under H.R. 1 (The “One Big Beautiful Bill” Act).

In our summer update on H.R. 1, we discussed several individual tax provisions were extended or expanded. Now is the perfect time to revisit them and make sure you’re ready before December 31.

1. The Big Picture: What Stayed and What Changed

The new law keeps many of the Tax Cuts and Jobs Act (TCJA) rules that were set to expire after 2025, while adding several new deductions and credits for individuals.

Key highlights:

• Tax brackets remain at TCJA levels.
  The 10%, 12%, 22%, 24%, 32%, and 35% brackets are effectively made permanent, with income ranges indexed for inflation, instead of reverting to pre-2018 rates.

• Standard deductions stay high.
  The expanded TCJA-style standard deduction is locked in going forward, still making itemizing less common for many households.

• New $6,000 senior deduction (with income limits).
  Beginning in 2025, taxpayers age 65 and older can claim an additional $6,000 deduction per person (2025–2028), on top of the existing additional standard deduction (subject to phase-outs based on income).

• SALT deduction cap temporarily increased.
  For tax years 2025–2029, the cap on state and local tax deductions increases from $10,000 to $40,000 for most filers ($20,000 if married filing separately), with income-based reductions for higher earners and a scheduled snap-back to $10,000 in 2030.

• New targeted deductions for workers and consumers.
  The law introduces several temporary deductions that reduce taxable income for:

  • Qualifying overtime pay (up to $12,500 / $25,000 MFJ).

  • Qualifying tip income (up to $25,000).

  • Interest on qualifying car loans for certain new, U.S.-assembled vehicles (up to $10,000 per year, 2025–2028).

Not all of these will apply to every household, but together they change how valuable itemizing, withholding strategies, and certain types of income can be in 2025 and beyond.

2. Year-End Actions That Can Make a Difference

Even with lower rates and higher standard deductions, what you do before December 31 still matters.

Here’s where to focus:

Review your income and withholding.
If your income increased this year, you changed jobs, or you added a second earner in the household, check whether your current withholding still lines up with your total income and deductions under the new rules. Adjusting now can reduce the risk of an underpayment surprise in April.

Time your charitable giving.
Because more taxpayers take the standard deduction, you may get more benefit by “bunching” charitable gifts into a single year to push your itemized deductions above the standard deduction. Donating appreciated assets (instead of cash) can also increase the tax benefit by avoiding capital gains and still claiming the charitable deduction.

Maximize retirement contributions.
For 2025, the 401(k) elective deferral limit is $23,500 (plus a $7,500 catch-up for those 50 and older, with a higher catch-up for ages 60–63 in some plans).

Whether you’re using a 401(k), IRA, or SEP-IRA, increasing pre-tax contributions before year-end can directly reduce your 2025 taxable income.

Take advantage of HSA and FSA balances.
If you’re eligible for a Health Savings Account (HSA), it still offers triple tax benefits: pre-tax contributions, tax-deferred growth, and tax-free withdrawals for qualified medical expenses. Flexible Spending Accounts (FSAs) may be “use-it-or-lose-it” or have limited carryover, so confirm your plan’s deadlines and avoid leaving money on the table.

Plan around the new SALT cap.
If you live in a higher-tax state or pay significant property taxes, the higher SALT cap could make itemizing more attractive again. At the same time, income phase-outs and AMT rules can limit the value of prepaying taxes. This is an area where a quick planning conversation can help you decide whether to:

• Prepay property taxes,

• Adjust your quarterlies, or

• Simply take the standard deduction and focus on other strategies.

Confirm senior, dependent, and education benefits.
If you or a family member is 65+ and within the income thresholds, make sure the new senior deduction is built into your 2025 planning. Similarly, review any dependent care, child, or education credits to see if updated income limits or phase-outs change your expected refund or balance due.

3. What’s Ahead in 2026

While H.R. 1 extends many favorable individual provisions, some changes phase in over the next few years:

• Certain homeowner rules (like mortgage-interest tweaks and energy-related credits) transition or expire after 2025.

• IRS guidance is still rolling out on the mechanics of the new deductions. For example, how employers report overtime, tips, and car-loan interest, and how those items will show up on individual returns.

That means 2025 is both a testing year and an opportunity: the sooner your strategy is aligned with the new rules, the easier it will be to adapt as guidance tightens.

4. The Takeaway

Year-end tax prep is about positioning yourself for the best outcome next spring, not just filing the forms you’re handed.

The combination of extended TCJA-style rules, new deductions for seniors and workers, and a temporarily higher SALT cap makes this the right time to:

• Confirm your withholding and estimated tax payments,

• Top up retirement and HSA contributions where it makes sense, and

• Verify you’re eligible for (and planning around) the new deductions you actually qualify for.

Even a handful of small adjustments before December 31 can make a measurable difference in your 2025 federal tax bill.

Need a Year-End Review?

Our team can help you look at your personal and business tax picture together so your 2025 strategy is both compliant and optimized under the new law.

If you’re an S-Corp owner, we’ll also connect this to your salary, distributions, health insurance, and retirement contributions so your entity-level decisions line up with the new individual rules.

Schedule a check-in before December 31 to make sure you’re taking full advantage of the deductions and credits available under H.R. 1.