Introduction
Recent tax law changes and updates have introduced several new credits and deductions that may reduce your federal tax liability. From childcare and education-related benefits to vehicle loan interest, senior deductions, and overtime pay, understanding what you qualify for can make a meaningful difference when filing. Below is a brief overview of key provisions to be aware of as you plan ahead.
The Child and Dependent Care Credit (CDCTC):
- If you paid for eligible care so you could work or look for work, you may qualify for the Child and Dependent Care Credit, which can lower your federal tax bill. Eligible care includes daycare, preschool, before/after-school programs, summer day camps (not overnight), and in-home care such as a babysitter, nanny, or au pair.
- A qualifying person includes a child under age 13 or a spouse/dependent of any age who cannot care for themselves and lives with you more than half the year.
- The credit amount is based on your income and a percentage of the qualifying expenses you paid.
Educator Expense Deduction (2025 & coming in 2026):
- 2025: Eligible K–12 educators can claim an above-the-line deduction of up to $300 for books, supplies, computer equipment, and classroom materials. Expenses over $300 are not deductible in 2025.
- Who qualifies: Teachers, instructors, counselors, principals, and aides working 900+ hours during the school year at a K–12 school.
- Eligible expenses: Books, classroom supplies, technology, equipment, and supplementary materials used in the classroom, plus certain professional development costs.
- Coming in 2026:
- The $300 above-the-line deduction remains, but additional educator expenses become deductible as itemized deductions (no longer disallowed).
- Athletic supplies for health/PE courses become eligible.
- “In the classroom” expands to “as part of instructional activity.”
- Coaches and interscholastic sports administrators are added as eligible educators.
Interest on Qualified Vehicle Loans:
- Deductible interest: Individuals may deduct interest paid on a loan used to purchase a qualified vehicle for personal use. Lease payments do not qualify.
- Maximum deduction: $10,000 per year.
- Income phase-out: Begins at $100,000 MAGI ($200,000 for joint filers).
- Qualified loans:
- Originated after December 31, 2024
- Used to purchase a vehicle whose original use begins with the taxpayer (used vehicles do not qualify)
- Secured by a lien on the vehicle
- Personal-use only (not business/commercial)
- Refinanced loans generally remain eligible.
- Qualified vehicles: Cars, minivans, vans, SUVs, pick-up trucks, or motorcycles weighing less than 14,000 lbs and final assembly in the U.S.
Deduction for Seniors
- Extra deduction: Individuals age 65+ can claim an additional $6,000 deduction ($12,000 for married couples where both qualify), on top of the standard senior deduction.
- Income phase-out: Begins at $75,000 MAGI ($150,000 for joint filers).
- Eligibility: Must be 65 or older by the last day of the tax year.
- Available to all taxpayers: Applies whether you itemize or take the standard deduction.
- Filing requirements: Include the Social Security Number(s) of qualifying individual(s); married couples must file jointly to claim.
No Tax on Overtime:
- Deduct qualified overtime pay: Individuals can deduct the portion of overtime pay above their regular rate (e.g., the “half” of “time-and-a-half”) required by the FLSA.
- Maximum deduction: $12,500 per individual ($25,000 for joint filers).
- Income phase-out: Begins at $150,000 MAGI ($300,000 for joint filers).
- Filing requirements: Include your Social Security Number; married couples must file jointly to claim.
How can Griffing & Company help you?
At Griffing & Company, we help individuals and businesses maximize tax savings, minimize risk, and simplify complex financial decisions. Our services include:
- Tax Planning & Preparation: Identify overlooked and brand-new deductions and credits to reduce your tax bill.
- Financial Guidance for Seniors: Navigate new senior deductions and retirement planning strategies.
- Business & Self-Employed Support: From C-corp and LLC structures to payroll and expense planning, we help your business stay compliant and efficient.
- Audit Support & IRS Guidance: Expert representation and advice if questions arise with the IRS.
- Personalized Advice: We tailor strategies to your unique situation, ensuring you take advantage of every opportunity available under current tax law.
Have questions about how these deductions apply to your situation?
Our team at Griffing & Company can help you identify opportunities, stay compliant, and plan confidently for the year ahead.
Written by Corinne Hammond, Tax Manager
