The new federal tax bill for 2025 brings a number of changes that will affect how much people pay, and how much they keep, at tax time. Many taxpayers will see the impact of higher standard deductions, adjusted tax brackets, and new relief aimed at working families, seniors, and small-business owners. These updates are particularly meaningful for households in higher-tax areas such as Orange County, California, where state and local taxes already create a heavier financial burden.
One of the more talked about updates is a new overtime related adjustment. Certain employees who receive a significant amount of overtime pay may see that income treated more favorably than in prior years, potentially reducing their overall tax bill. For hourly workers who have been picking up extra shifts or seasonal overtime, this change can make a noticeable difference, and proper reporting becomes increasingly important.
There is also an expanded deduction for seniors. Taxpayers age 65 and older may qualify for an additional amount on top of the regular standard deduction. For retirees and older adults living on pensions, Social Security, investment income, or part-time wages, this can meaningfully lower taxable income and help stretch fixed resources.
Homeowners and other itemizers will see updated rules around state and local tax deductions, charitable giving, and medical expenses. Some residents of Orange County and other high-cost areas may still benefit from itemizing, particularly if they have significant property taxes or mortgage interest. Others will find that the increased standard deduction now gives them a better result than tracking and deducting individual expenses. A careful comparison at filing time can prevent surprises.
Business owners, including sole proprietors, LLCs, partnerships, and S-corporations, will notice expanded opportunities to deduct equipment purchases, revised depreciation rules, and adjustments to the deduction for qualified business income. These changes can influence decisions about when to buy equipment, how to structure compensation, and how to plan for year-end. Solid bookkeeping and a well-considered approach can turn these updates into real savings.
The IRS is also investing more in its technology and matching programs, which may lead to additional notices related to Forms W-2, 1099, and 1099-K if information does not align. Timely and accurate responses can prevent unnecessary penalties and interest.
At Mraz Tax Solutions, we work with individuals, families, and business owners throughout Orange County and across the country to navigate these changes. We are available to review how the new law affects your overtime income, senior deduction, itemized-versus-standard deduction choice, and business tax strategy. Whether you are preparing a straightforward return or managing a more complex situation, we can help you file confidently under the 2025 rules.
Mraz Tax Solutions is your trusted federal, state and local tax advisor and preparer. With our comprehensive income tax preparation services, we cater to both personal and small business tax needs. Our experienced professionals handle your tax returns, ensuring accuracy and maximizing deductions to help you minimize your tax liability.
In addition to tax return preparation, we offer tax return reviews to ensure the correctness and completeness of your filing. We understand the importance of avoiding errors and discrepancies, and our experts are here to provide a thorough review of your tax returns, giving you peace of mind.
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