23 September 25 
Taxes Executive Summary
- For tax year 2025, Form 1040 adds several clarifying checkboxes (combat zone/deceased, U.S. residency, and more granular dependent info),
- Splits a few lines (capital gains and AGI), and raises the standard deduction amounts.
- Beyond the form, the IRS issued its usual inflation adjustments for 2025 (e.g., adoption credit, bracket thresholds, FEIE).
- The changes aim to improve clarity and keep key thresholds aligned with inflation.
What changed on Form 1040 for 2025
1) New checkboxes and filing information
- Check boxes for Filed pursuant to §301.9100-2, Combat zone, and if the filer (or spouse) is Deceased.
- New checkbox to confirm your main home was in the U.S. for more than half of 2025.
2) Dependents: expanded detail
- Per-dependent indicators for lived with you more than half the year, whether they were in the U.S., and if they are a full-time student or
permanently and totally disabled. - Additional confirmations around MFS/HOH status when living apart or legally separated.
3) Income section clarifications
- Checkboxes to flag rollovers, qualified charitable distributions (QCDs), and certain child income inclusions on dividends/capital gains.
- Capital gain (or loss) is split into 7a/7b with indicators for Schedule D and child capital gains.
- Social Security line adds a checkbox for certain MFS filers who lived apart all year.
4) AGI & deductions
- AGI split into Line 11a (AGI) and Line 11b (AGI carried forward) for clarity.
- Standard deduction amounts increase (see table below).
- New line for additional deductions from Schedule 1-A.
5) Credits, payments & refunds
- Checkboxes to indicate if you’re not claiming the EIC or the Additional CTC (when applicable).
- Refundable adoption credit receives its own line in 2025.
- If estimated payments were made with a former spouse, the return now requests the former spouse’s SSN.
- Overpayments can be applied to 2026 estimated tax (was 2025 on the 2024 form).
Beyond the form: notable 2025 IRS updates
- Annual inflation adjustments: The IRS issued its 2025 cost-of-living updates across dozens of provisions
(e.g., tax bracket thresholds, phaseouts, adoption credit, etc.). - Adoption credit: Maximum expenses eligible increase to $17,280 for 2025 (up from $16,810 for 2024).
- Foreign Earned Income Exclusion (FEIE): The maximum exclusion rises to $130,000 for 2025.
These adjustments can influence planning around withholding, bunching deductions, timing income/expenses, and cross-border compensation.
Infographic
Side-by-Side: 2024 vs. 2025 (Form 1040 highlights)
| Item | 2024 | 2025 (draft) |
|---|---|---|
| New filing/checkbox items | — | Adds boxes for §301.9100-2, Combat zone, Deceased; U.S. residency checkbox |
| Dependents detail | Basic info + credit eligibility | Adds lived-with-you, in-U.S., student/disabled indicators; extra HOH/MFS confirmations |
| Income clarifications | Fewer checkboxes | New checkboxes for rollovers/QCDs/child income; capital gains split into 7a/7b |
| AGI presentation | Single AGI line (Line 11) | AGI split into Lines 11a & 11b |
| Standard deduction (Single/MFS) | $14,600 | $15,750 |
| Standard deduction (Head of household) | $21,900 | $23,625 |
| Standard deduction (MFJ/QSS) | $29,200 | $31,500 |
| Credits & payments | Reserved line; fewer elections | Refundable adoption credit line; EIC/ACTC “do not claim” checkboxes; ex-spouse SSN for joint estimates |
| Apply overpayment to next year | 2025 estimated tax | 2026 estimated tax |
Planning considerations
- Run a withholding check early in 2025—bracket thresholds and standard deduction shifts can alter your refund/amount due.
- Coordinate credits (child-related, education, adoption) and new 1040 checkboxes with your documentation.
- For expats: confirm FEIE eligibility and housing amounts with a pro before the year-end.
- Cash-flow timing: consider bunching deductions or timing income/expenses to fit within the new 2025 thresholds.
Comments