From the desk of...
Robert Weinerman, Director of Training
A First Look at the 2025 Tax Forms.
In last month’s newsletter, I discussed how changes to the tax code introduced in the 2025 Reconciliation Act might impact income adjustment professional judgments based on 2025 income. The IRS has issued draft versions of the 2025 Form 1040 and new Schedule 1-A, and I wanted to update the information I shared last month.
You can view the draft Form 1040 here and the draft Schedule 1-A here.
First, the good news.
Unlike my supposition in my last update, Schedule 1-A is not part of a revised Schedule 1. Schedule 1-A is a new, stand-alone tax form that allows taxpayers to calculate four new tax deductions:
- The No Tax on Tips deduction
- The No Tax on Overtime deduction
- The No Tax on Car Loan Interest deduction
- The Enhanced Deduction for Seniors
Schedule 1-A will collect the information needed to calculate a taxpayer’s eligibility for these new deductions. It is completely separate from Schedule 1.
These four deductions will be transferred from Schedule 1-A to Form 1040, line 13b, which is immediately after the Qualified Business Income Deduction on Form 1040, line 13a. This means that the deductions will not reduce the adjusted gross income (AGI) after all – they will only reduce the taxable income. So, the AGI on a 2025 tax return will be calculated almost exactly as it was calculated in 2024, and we don’t need to worry about changes in the definition of AGI complicating income adjustment professional judgments.
Changes on the horizon that you should be aware of.
Other than this new line 13b, there are several other changes to Form 1040. Most of these will not impact how we process financial aid directly, but some may indirectly create some issues...
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