New tax laws: What you need to know before you file

Maine (WABI) - 2025 is being called one of the biggest years when it comes to tax law changes.

That includes deductions for tips, for being a senior and for buying a car.

For 38 years, Diane Morse of Marshall Planning LLC in Bangor, has helped people file their taxes. And while most of us dread this time of year, Morse has a different opinion.

“I love taxes,” says Morse, smiling and chuckling. “I do love taxes, this is better than Christmas for me.”

That’s because every year, Morse says she finds deductions that clients missed.

Like Maine’s Property Tax Fairness credit. It’s been around since 2013.

“If you don’t put the real estate taxes on this form, it’s not going to calculate,” warns Morse. “I see a lot of people that do their own, you don’t see that rebate. And it can be substantial.”

Mark Steber is the Chief Tax Officer for Jackson Hewitt Tax Services.

“As I always say, if you leave it off, it stays off,” says Steber. “The IRS doesn’t just send you more money.”

Steber notes it’s not uncommon for taxpayers to misunderstand the rules.

“The new senior deduction, for example,” he says. “$6,000 per person. I’m amazed how many people say, ‘Well, I’m not getting social security so I don’t get that. Wrong, not true. You just have to be 65, there’s no requirement for social security.”

Morse adds there’s also confusion over the overtime deduction.

If you earned overtime pay at work last, you may be able to deduct up to $12,500 thanks to a new tax law.

You’ll need your last pay stub for 2025 to calculate it, since employers are not required to list overtime separately on a W-2.

“The overtime has to be calculated separately,” she explains. “This year the employers are not required to put it on the form, the W-2, so what happens is, I need to see your last pay stub for 2025 to calculate that deduction.”

Did you buy a new car last year?

You could claim up to $10,000 in interest payments thanks to a new tax law.

“But the problem is, I’ve had a lot of people come in and think if they buy a new car, which is new to them, they can deduct the car loan interest,” says Morse. “It has to be a 2025 car that they bought, new.”

Morse warns this is also the last year taxpayers can file for Residential Energy credits.

“If you do doors, windows, those are two of the most common, insulation,” says Morse. “That might qualify. You do have to have the manufacturing code of the new windows or doors that you put in, unlike prior years.”

And just because you didn’t receive a 1099 or W-2 form, you still have to claim those taxes. That’s because the IRS already has that information. and they will come find you.

“Yeah, the IRS, they’re good at one thing: getting their money,” says Steber, chuckling. “They’re not so good at making sure you get all your money.”

If you do get an expected phone call from someone claiming you owe money to the IRS, there’s a good chance it’s a scam.

The “tax agent” may even threaten you with fines or arrest.

Know that the IRS will never call and threaten to arrest you. If there is an issue with your taxes, they’ll most likely contact you by mail.

And if you do owe money to the federal government, they won’t ask for it in the form of prepaid debit cards or wire transfers.