As featured in Forbes Councils.
We’re all familiar with the proverb “Knowledge is power.” When it comes to filing your taxes, it couldn’t be truer; knowing what credits or deductions are available this year could be the difference between dominating and dreading the process.
Signed into law on July 4 of last year, the One Big Beautiful Bill (OBBB) made adjustments to tax provisions that impact millions of Americans. These changes will benefit some Americans by making some tax cuts that were set to expire permanent and by introducing or increasing other deductions that people can claim toward a larger refund.
For All Taxpayers
When filing taxes, you can claim a standard deduction or an itemized deduction. Standard deductions lower your income by one fixed amount, while itemized deductions require you to provide an itemized list of eligible expenses. Financial advisors suggest you claim whichever minimizes the tax you owe to the IRS.
For the 2025 tax year, the standard deduction for single taxpayers or married individuals filing separately is $15,750—up from $14,600 in 2024. The standard deduction for couples filing jointly is $31,500—up from $29,200.
In addition to the increased standard deduction, OBBB extended some tax breaks offered in the 2017 Tax Cuts and Jobs Act (TCJA), making them permanent. This includes lowered marginal tax rates, or the percentage at which your last dollar of taxable income is taxed, and increased income thresholds for each tax bracket. In other words, a higher income is taxed at a lower percentage.
For Seniors
Those 65 and older can look forward to a new deduction this tax filing period: a temporary senior deduction. Individuals can claim up to $6,000, and couples can claim up to $12,000, reducing taxable income and increasing refunds, while monthly benefits are being adjusted by 3% to the cost of living this year.
The deduction, in place through the end of 2028, decreases with a senior’s modified adjusted gross income. This impacts single people who make over $75,000 and couples who make over $150,000.
For Parents/Guardians
The Child Tax Credit (CTC), available to taxpayers with dependents under the age of 17 with a Social Security number, has been bumped up from $2,000 to $2,200 this tax year.
This credit, available to parents or guardians who make under $200,000 individually or $400,000 jointly, is now a lasting fixture of the 2017 TCJA. For every $1,000 earned over the thresholds, the credit is decreased by 5%.
The portion of the credit that is refundable, or the additional child tax credit, is available up to $1,700 this tax season. Beginning next tax season, the credit will be adjusted for inflation.
For those who do not qualify for the CTC, there is a deduction called the Credit for Other Dependents (ODC). The ODC is a $500 nonrefundable credit for individuals who may not be children, or under 17, but lived with you all year and did not support themselves. For instance, if you’ve housed aging parents, college students or unrelated friends, this might be the credit for you.
Lastly, parents or guardians of adopted children can claim the Adoption Tax Credit. Families can receive as much as $17,280 per adopted child—increased from $16,810 in 2024. Up to $5,000 of this credit can be returned to you as a refund to support your child.
For Students
Several education tax provisions established in the TCJA were also cemented by the OBBB. This includes the American Opportunity Tax Credit (AOTC), a credit for students to offset education expenses for the first four years of higher education.
With the AOTC, a maximum credit of $2,500 can be applied toward tuition, books and other required supplies to achieve a degree—but not living expenses or transportation. This credit is partially refundable; if the credit brings the amount of tax you owe to zero, up to $1,000 can be put back in your pockets.
The Lifetime Learning Credit (LLC) offers up to $2,000 per tax return to those who are pursuing graduate or other professional degrees. This can include courses designed to help you acquire or improve job-related skills.
There is no limit to the number of tax years you can claim the LLC, which can help lower the tax bills of those who don’t qualify for the AOTC but are still spending money on tuition, books and other class-related supplies. There is a limit to the amount of money you can make to receive the credit (less than $80,000 individually or $160,000 jointly).
For The Future
With these changes to your taxes, it’s likely you’ll have more money left to spend or save. This could mean more meals with loved ones or gifts to show your appreciation—or it could mean a more significant deposit into retirement or college savings accounts. For some, it might mean all of the above.
Regardless of how you use this money, you should see similar benefits in the next tax season. For the 2026 tax year, your withholding amount on your paychecks will be adjusted. According to the IRS, new guidance around paycheck withholding will be offered in the coming months.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
