As tax season kicks off in January 2026 for 2025 returns, $100K-$200K earners are in a prime position to optimize their filings—but also at risk of overpaying if they’re not up to speed on changes from the One Big Beautiful Bill Act (OBBBA), signed in July 2025. For single households or sole breadwinners in this bracket, where take-home pay after federal taxes is roughly $75K-$140K, strategic planning can save thousands. At SixFigureEdge, we’re breaking down key updates, essential deductions and credits, common pitfalls, and actionable tips to help you navigate IRS deadlines (April 15, 2026, or October 15 with extension) and keep more of your hard-earned money.

Key Changes for 2025 Tax Year

OBBBA introduced several taxpayer-friendly adjustments, focusing on deductions for everyday expenses and high earners. Here’s what matters for your bracket:

  • Standard Deduction Increase: For 2025, the standard deduction rises to $15,750 for singles (up from $15,000), $23,625 for heads of household (up from $22,500), and $31,500 for married filing jointly (up from $30,000). Seniors (65+) add $2,000 for singles/HOH or $1,600 per spouse for MFJ. This could reduce taxable income by $750-$1,500, saving $180-$360 at the 24% bracket.
  • Senior “Bonus” Deduction: New for 2025-2028: $6,000 per senior ($12,000 for qualifying couples), phasing out at $75K AGI for singles/$150K for MFJ. If you’re in this age group, it could cut taxes by $1,440-$2,880.
  • Tips and Overtime Deductions: Up to $25,000 deduction for tip income and $12,500 per person ($25,000 max MFJ) for overtime, phasing out at $150K single/$300K MFJ. Ideal for service or shift workers in your bracket, potentially saving $3,000-$6,000.
  • Car Loan Interest Deduction: New: Up to $10,000 interest on loans for U.S.-assembled vehicles bought after 2024, phasing out at $100K single/$200K MFJ. Could save $2,400 at 24% bracket.
  • SALT Cap Increase: State and local tax deduction cap rises to $40,000 (from $10,000), phasing down for $500K+ earners to a $10,000 minimum. Big win if you’re in high-tax states like California or New York.
  • Tax Brackets Remain Stable: No major shifts—rates stay 10%-37%, with the 24% bracket for singles at $103,350-$197,300 (MFJ $206,700-$394,600).

These changes aim to ease burdens on middle-to-high earners, but they phase out quickly—check your AGI to qualify.

Essential Deductions and Credits for $100K-$200K Earners

Maximize these to lower your bill—many are refundable or reduce taxable income directly.

  • Child Tax Credit: $2,200 per child under 17 ($1,700 refundable), phasing out at $200K single/$400K MFJ. For a $150K earner with two kids, that’s up to $4,400.
  • Child and Dependent Care Credit: 20%-50% of $3,000 for one dependent/$6,000 for two+, no phase out but percentage decreases with income. Saves $600-$3,000.
  • Lifetime Learning Credit: 20% of up to $10,000 in education costs; phases out $80K-$90K single/$160K-$180K MFJ. Partial credit saves ~$1,000-$1,500.
  • Saver’s Credit: 10-50% of up to $2,000 IRA/401(k) contributions ($4,000 MFJ), phasing out at $39,500 single/$79,000 MFJ. Ineligible for most in this bracket, but check if AGI qualifies.
  • Other Deductions: Medical expenses (over 7.5% AGI), charitable donations (up to 60% AGI), and student loan interest ($2,500 max, phases out at $75K single/$155K MFJ). Mortgage interest on up to $750K debt.

For sole earners, focus on itemizing if deductions exceed standard—many with high SALT or mortgage qualify.

Common Tax Mistakes to Avoid

High earners often trip up here, costing thousands:

  • Failing to Maximize Retirement: Not contributing max $23,500 to 401(k) (+$7,500 catch-up; $11,250 for 60-63) misses tax deferral and employer matches.
  • Short-Term Capital Gains: Selling assets before 1 year triggers ordinary income rates (up to 37%) vs. long-term (0-20%).
  • Poor Recordkeeping: Missing deductions due to lost receipts—use apps for tracking.
  • Ignoring Phase-Outs: Overlooking how AGI phases out credits like CTC or Lifetime Learning.
  • Improper Debt Claims: Forgetting to deduct student loans or miscalculating cost basis on investments.

Strategies for $100K-$200K Filers

  • Roth Conversions: Shift traditional IRA to Roth for tax-free growth—ideal if expecting higher brackets; pay tax now at 24% vs. 32% later. Example: Convert $100K in low year to save long-term.
  • Bundle Deductions: If near itemizing threshold, bunch charitable gifts every other year.
  • Use HSAs/FSAs: Contribute pre-tax for medical—$4,300 single/$8,550 family HSA limit saves $1,000+ in taxes.
  • File Electronically: Faster refunds (21 days vs. 6 weeks paper).
  • Consult a Pro: For complex incomes, a CPA can uncover $5K-$10K in savings.

Filing 2025 taxes doesn’t have to be daunting—use these changes to your advantage. For this new year, make sure you’re taking advantage of these tax savings hacks.

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