New IRS Schedule 1‑A

The IRS released Schedule 1‑A (for tax year 2025) on March 2, 2026 in News Release IR‑2026‑28. (irs.gov) Amounts calculated on Schedule 1‑A are totaled in Part VI and flow to Form 1040, line 13b on the 2025 Form 1040. (irs.gov) The tip‑related deduction is capped at $25,000 per return and phases out for taxpayers with modified adjusted gross income (MAGI) above $150,000 ($300,000 for married filing jointly), and the instructions require reported tips and, for married claimants, a joint return. (irs.gov) The overtime deduction allows up to $12,500 for a single filer (up to $25,000 if married filing jointly), is limited to overtime paid as required under section 7 of the Fair Labor Standards Act, and is reduced when MAGI exceeds $150,000 ($300,000 joint). (irs.gov) The car‑loan interest break applies only to qualified passenger‑vehicle loan interest on loans originated after Dec. 31, 2024, is capped at $10,000, is phased out for MAGI above $100,000 ($200,000 joint), and requires the vehicle’s “final assembly in the United States” to qualify. (tax.thomsonreuters.com) ( ) The enhanced senior deduction requires the claimant (or spouse, for joint filers) to have been born before Jan. 2, 1961, provides a maximum of $6,000 per qualifying person ($12,000 if both spouses qualify), and phases out when MAGI exceeds $75,000 ($150,000 joint). (irs.gov) ( ) All four Schedule 1‑A items are “below‑the‑line” deductions that reduce taxable income but do not change AGI, are temporary for tax years 2025–2028, and will first be claimed when taxpayers file 2025 returns in the 2026 filing season. (turbotax.intuit.com) ( ) The instructions include worksheets, occupation lists, and reporting examples and state that taxpayers must have valid Social Security numbers to claim many of the deductions, while tax‑software vendors and e‑filing are being highlighted for automating MAGI checks and reducing errors when reporting Schedule 1‑A amounts. (irs.gov) ( )