Introduction
With major changes proposed under Trump’s 2025 tax plan, proactive tax planning is more important than ever. From adjusted income tax brackets to expanded credits and deduction caps, the new rules will directly affect how individuals and businesses file their 2025 returns.
In this final installment, we provide a step-by-step guide to prepare for the 2025 tax season under the new rules including IRS forms, examples, deduction strategies, and professional planning insights.
Summary of 2025 Tax Changes (IRC References)
- IRC §1 – Lower individual tax brackets
- IRC §24 – Expanded Child Tax Credit (up to $3,500/child)
- IRC §164(b)(6) – Increased SALT deduction cap for itemizers
- IRC §199A – Retained 20% QBI deduction for businesses
- IRC §3121 / §3401 – Overtime and tips excluded from taxable income
- IRC §2010 – Higher estate tax exemption
Step-by-Step Tax Preparation Guide
- Review 2024 Return & Adjust W-4
Use your 2024 tax return as a base to project 2025 changes. Adjust your W-4 if your withholding will overestimate your tax due based on the new lower brackets or credits.
- Determine Standard vs. Itemized Deduction
With a higher SALT deduction cap, more taxpayers in high-tax states may benefit from itemizing. Use Schedule A on Form 1040 to compare.
- Claim Expanded Credits
Ensure you qualify for new benefits:
- Child Tax Credit (Form 1040 + Schedule 8812)
- Earned Income Tax Credit (Form 1040)
- Business deductions or QBI (Form 8995)
- Maximize Business Deductions
If self-employed or a business owner:
- Expense qualifying equipment under IRC §179 using Form 4562
- Deduct up to 20% of qualifying income via QBI
- Track expenses in real time to reduce errors at year-end
- Consider Estate and Gift Strategies
With increased exemption amounts under IRC §2010, high-net-worth individuals should review gifting and legacy plans.
Example Scenario
Case: Amit & Rhea – Married, 2 kids, own a home in California
- Income: $180,000
- SALT taxes paid: $18,500
- Eligible for QBI deduction (consulting LLC)
- CTC: 2 × $3,500 = $7,000
- SALT deduction: $18,500 (up to $20,000 allowed)
- Result: Over $10,000 in additional tax savings compared to 2024
IRS Forms Checklist for 2025
| Purpose | IRS Form |
|---|---|
| Individual Tax Filing | Form 1040 |
| SALT & Other Itemized Deductions | Schedule A |
| QBI Deduction | Form 8995 |
| Child Tax Credit | Schedule 8812 |
| Business Equipment Deduction | Form 4562 |
| R&D Credit (if eligible) | Form 6765 |
| Adjusting Withholding | Form W-4 |
Common Pitfalls to Avoid
- Assuming old rules still apply (e.g., $10K SALT cap)
- Failing to update W-4 = under/over withholding
- Ignoring refundable credit opportunities
- Not claiming QBI for self-employed income
- Rushing into filing without CPA review
Conclusion
Trump’s 2025 tax reform presents opportunities but only for those who prepare. Whether you’re a salaried employee, parent, investor, or business owner, these new rules can either boost your refund or leave you scrambling if you wait too long.
Start now, organize your paperwork, use the correct forms, and build a filing strategy tailored to your income and deductions.
Call to Action
Are you ready to file under the new 2025 tax rules?
A single missed deduction or credit could cost you thousands. With new rules for SALT, CTC, QBI, and more, filing correctly means more than just plugging numbers into software.
Schedule a meeting with Anshul Goyal, CPA, EA, FCA
About Our CPA
Anshul Goyal, CPA, EA, FCA, is a U.S.-licensed Certified Public Accountant and IRS-authorized Enrolled Agent. He specializes in proactive tax strategy, IRS compliance, and personalized filing support for Indian residents in the U.S. and American businesses nationwide.
Disclaimer
This blog is intended for educational purposes only. Tax laws may change based on congressional approval. Consult a licensed CPA for personalized guidance.