What’s New for Tax Year 2025

Trump accounts and new Form 4547. Recent legislation allows parents, guardians, and other authorized individuals to elect to establish a new type of individual retirement account, called a Trump account, for the exclusive benefit of certain children. If the child was born after 2024 and before 2029, is a U.S. citizen, and meets certain other requirements, the authorized individual may also elect to receive a $1,000 pilot program contribution to the child’s Trump account. Both elections can be made on Form 4547, which can be filed at the same time as the authorized individual’s 2025 income tax return. For more information on Trump accounts, and to learn how to make these elections, see Form 4547 and its instructions. Student loan interest deduction. For 2025, the amount of your student loan interest deduction is gradually reduced (phased out) if your MAGI is between $85,000 and $100,000 ($170,000 and $200,000 if you file a joint return). You can’t claim the deduction if your MAGI is $100,000 or more ($200,000 or more if you file a joint return). See chapter 4. Education savings bond program. For 2025, the amount of your education savings bond interest exclusion is gradually reduced (phased out) if your MAGI is between $99,500 and $114,500 ($149,250 and $179,250 if you file a joint return). You can’t exclude any of the interest if your MAGI is $114,500 or more ($179,250 or more if you file a joint return). See chapter 9. Business deduction for work-related education. Generally, if you claim a business deduction for work-related education and you drive your car to and from school, the amount you can deduct for miles driven from January 1, 2025, through December 31, 2025, is 70 cents a mile. See chapter 11.