We’ve reached the midpoint of 2025, and with it comes a fresh wave of important tax changes you need to know.
From IRS bracket adjustments to groundbreaking state-level reforms, staying informed now can save you money—and stress—later.
1. New Federal Tax Brackets and Standard Deductions
- Standard Deduction: Now $15,000 for single filers and $30,000 for married couples (up from $14,600 / $29,200).
- Bracket Adjustments: Tax brackets shifted upward to account for inflation—meaning you may fall into a lower effective tax rate. [IRS]
2. “One Big Beautiful Bill Act” – Major Federal Tax Overhaul
- Child Tax Credit: Temporarily increased to $2,500 per child through 2028.
- SALT Cap Raised: From $10,000 to $40,000 for taxpayers earning under $500,000. [Cooley]
- Tip & Overtime Tax Elimination/Deductions: New proposed deductions aim to reduce tax burden on working-class taxpayers.
- Business Incentives: Immediate expensing for R&D and equipment purchases. [MarketWatch]
Note: This legislation is still under Senate review.
3. Crypto Gets Formal Reporting – Meet Form 1099-DA
Starting this year, crypto exchanges must issue Form 1099-DA to report digital asset transactions.
If you trade crypto, keep records clean to avoid penalties. [H&R Block]
4. IRS Reductions May Cause Delays
The IRS has laid off 6,000–7,000 probationary staff members, sparking concern about potential processing delays and service slowdowns.
Be prepared to wait longer for correspondence and refunds. [Wikipedia]
5. State-Level Tax News: Major Shifts Across the U.S.
- Missouri: Eliminated state capital gains tax. Lawmakers are also debating a shift to a consumption-based system. [AP]
- New York: Approved income tax cuts, new child tax credits, and refund checks for lower-income residents. [NY Senate]
- Kansas: Eliminated the food sales tax—making groceries tax-free statewide. [Investopedia]
- Illinois: Enacted new taxes on sports betting and remote business income. [Journal Courier]
- Texas: Introduced property tax relief and larger homestead exemptions. [MySanAntonio]
6. Inflation-Adjusted Exemptions and Credits
- Foreign Earned Income Exclusion: Increased to $130,000.
- Estate Tax Exemption: Now $13.99 million.
- Gift Tax Exclusion: Increased to $19,000 per recipient. [IRS]
7. IRS Scrutinizing Key Credits
- Fuel Tax Credit: New documentation standards required.
- Other Withholding Claims: Under tighter review for abuse or error. [IRS]
Need Help Understanding These Changes?
These updates are just the tip of the iceberg.
If you’re unsure how they apply to your tax situation—or if you’re facing back taxes, penalties, or an IRS notice—we’re here to help.
Schedule a free consultation with our experienced team at BadranTax. We resolve complex tax issues and help everyday taxpayers get clarity and relief.
Frequently Asked Questions (FAQ)
What does Missouri’s capital gains tax change mean?
Missouri now exempts capital gains from state income tax. This could make the state more attractive for investors and entrepreneurs—though it may also reduce state funding for public services.
How will IRS staffing cuts impact my taxes?
Fewer IRS agents may lead to processing delays for returns and communications. However, enforcement for serious issues like fraud will still remain a priority.
Is the “One Big Beautiful Bill” law yet?
Not yet. The House passed the bill, but the Senate has yet to finalize it. Provisions may change—stay tuned for updates or talk with your tax professional.
How does Form 1099-DA affect crypto users?
Exchanges must report your digital asset transactions to the IRS, making it easier for the agency to track gains/losses. Keep detailed records to avoid compliance issues.
What states are considered “tax-friendly” right now?
Missouri (capital gains), Delaware, Florida, Texas, Tennessee, South Dakota, and Wyoming are popular for low or no income tax. Kansas is now top for food tax savings.
