DeductionsMar 27, 2026
What is the new IRS Schedule 1-A form for 2025, and do I need to file it?
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Schedule 1-A is a brand-new IRS form created for the 2025 tax year to claim four specific deductions introduced by the One Big Beautiful Bill Act (OBBBA). You attach it to your Form 1040 — similar to how you attach Schedule A for itemized deductions or Schedule C for self-employment income.
The four deductions claimed on Schedule 1-A:
| Deduction | What It Covers | Income Phase-Out |
|---|---|---|
| No Tax on Tips | Qualified tip income from tipped occupations | Phases out above $150,000 ($300,000 MFJ) |
| No Tax on Overtime | The "half" portion of time-and-a-half overtime pay, up to $12,500 ($25,000 MFJ) | Phases out above $150,000 ($300,000 MFJ) |
| Car Loan Interest | Interest on new qualified passenger vehicle loans, up to $10,000/year | Income limits apply |
| Enhanced Senior Deduction | Additional $6,000 deduction for taxpayers age 65+ | Phases out above $75,000 ($150,000 MFJ) |
Do you need to file Schedule 1-A?
You only file Schedule 1-A if you are claiming at least one of the four deductions above. You do not need to file it if none apply to you.
How to file:
- All major tax software (TurboTax, H&R Block, TaxAct, FreeTaxUSA) supports Schedule 1-A for 2025 returns
- If using software, it will guide you through the questions and auto-complete the form
- If filing by paper, download Schedule 1-A from IRS.gov and attach it to your 1040
Important nuances:
- For the overtime deduction, only the premium portion of overtime counts — not your base hourly rate. If you earn $20/hour and get $30/hour for overtime, only the $10 premium is potentially deductible, not the full $30
- Tips must be from occupations on the IRS's official list at IRS.gov/TippedOccupations
- Your W-2 or 1099 may not separately break out tips or overtime — you may need pay stubs or employer records to substantiate the amounts
- These deductions are "above the line" (they reduce your AGI), which means they are available whether you take the standard deduction or itemize
Sources
Schedule 1-AOBBBAtips deductionovertime deductioncar loan interestsenior deduction2025
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Disclaimer: This information is for general educational purposes and is not professional tax advice. Tax situations vary. Consult a qualified tax professional for advice specific to your circumstances.