Explore New Tax Breaks and Their Impact on Your Tax Return

Tax season is nearing its April 15 filing deadline. New measures passed last summer aim to ease tax burdens for many Utah residents.

As you Explore New Tax Breaks and Their Impact on Your Tax Return, pay attention to eligibility rules and limits. The changes could mean larger refunds for some filers.

Seniors Gain an Additional Deduction

Taxpayers who turn 65 by Dec. 31, 2025, qualify for an extra $6,000 deduction. Married couples with both spouses 65 or older can claim $12,000.

That boost may reduce taxable income enough to eliminate federal income tax for low-income filers. The Utah Association of Certified Public Accountants expects this to help many older residents.

State and Local Tax Deduction Cap Rises

The longstanding $10,000 cap on state and local tax deductions has been raised to $40,000. Homeowners with high property taxes will see the biggest change.

This expansion creates more room for deductions, which can translate to tax savings for affected filers.

New Rules for Tips and Gratuities

Certain tips received by service workers are no longer taxed under the new law. Eligible tips must be voluntary and set by the person leaving the tip.

Mandatory service charges or required gratuities do not qualify. The new allowance lets workers deduct up to $25,000 in qualified tips.

Overtime Tax Relief for 2025 Work

Workers who put in more than 40 hours per week in 2025 may receive a tax break on overtime. Full wages remain reportable on tax returns.

The break applies to the extra half of time-and-a-half pay. For example, earning $75 per hour when base pay is $50 means the $25 premium is eligible for relief.

Car Loan Interest May Be Deductible

Interest on a car loan purchased in 2025 can be deductible up to $10,000. Vehicles must weigh under 14,000 pounds and have final assembly in the United States.

Foreign brands assembled domestically can qualify. Use the National Highway Traffic Safety Administration VIN decoder to confirm assembly location.

Limitations and Where to Get Help

Each break includes important restrictions and documentation requirements. Not every taxpayer or purchase will meet the rules.

Susan Speirs, CEO of the Utah Association of Certified Public Accountants, says filers should review details carefully. The association offers year-round guidance on Facebook, Instagram, and TikTok.

Filmogaz.com will continue coverage as taxpayers prepare their returns. If you have questions, consult a CPA to confirm how these changes apply to your situation.