Which 2025 IRS forms changed deductions reported on Schedule A?
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Executive summary
Congress’s “One Big Beautiful Bill” (OBBBA) added four temporary below‑the‑line deductions for tax years 2025–2028 and the IRS drafted a new Schedule 1‑A to capture them; the draft Schedule 1‑A lists deductions for qualified tips, overtime compensation, certain car‑loan interest, and an enhanced senior deduction rather than moving those items onto Schedule A (itemized deductions) [1] [2]. The IRS also issued draft 2025 Schedule A unchanged in core purpose — it remains the place for mortgage interest, charitable gifts and SALT reporting — while Schedule 1‑A is intended to hold the new “additional deductions” created by OBBBA [3] [1].
1. New temporary deductions landed on a new form, not Schedule A
Tax changes in OBBBA for 2025–2028 created four distinct below‑the‑line deductions and the IRS responded by drafting a separate Schedule 1‑A (titled “Additional Deductions”) to compute and report them; the drafts show these are deductions from adjusted gross income and are handled separately from Schedule A’s itemized deductions [1] [2]. Professional trade groups and tax preparers highlight that the IRS deliberately added Schedule 1‑A rather than trying to pack these novel deductions onto the existing Schedule A [4] [1].
2. What the draft Schedule 1‑A actually covers
According to IRS drafts and technical reviews, Schedule 1‑A in 2025 is structured to compute four new deductions: (a) a deduction for qualified tips (including tips reported on W‑2s or 1099s), (b) a deduction for certain overtime compensation, (c) a deduction for qualified passenger vehicle loan interest (QPVLI), and (d) an enhanced deduction targeted at seniors — each subject to particular eligibility conditions and MAGI phase‑outs in the draft instructions [1] [2].
3. Why these items didn’t simply change Schedule A
Schedule A continues to serve traditional itemized deductions (mortgage interest, charitable gifts, state and local taxes, casualty/disaster losses, etc.) and the IRS’s draft Schedule A for 2025 retains that role; the new OBBBA provisions are structured as “additional deductions” below the line, prompting the separate Schedule 1‑A to avoid conflating distinct statutory rules with Schedule A’s longstanding itemized deduction framework [3] [1]. The AICPA and other commentators note the draft nature and warn state conformity and final placement could still vary [4].
4. Practical impacts and transitional complications
Tax professionals flagged operational frictions: for example, the qualified‑tips deduction relies on occupational lists and reporting codes the IRS planned to update, but those W‑2 code changes are not expected until 2026, forcing taxpayers and preparers to rely on records or transitional rules for 2025 [2] [4]. The draft schedule also requires coordination with other schedules (Schedule C, E, F) for where interest is already deducted, creating potential double‑counting pitfalls that filers must watch [4].
5. Draft status, final forms and what to watch
All sources emphasize the drafts are subject to change: the IRS released draft Schedule 1‑A and draft Schedule A for comment and the AICPA, tax‑software vendors and expat advisors urge taxpayers to use the final form when available because language, line placement, phase‑outs and filing instructions may be revised before the 2026 filing season [1] [4] [2]. The IRS forms page and forms comments process are the formal channels for updates [5] [1].
6. What these changes do not say (limitations in reporting)
Available sources do not mention any permanent removal of traditional Schedule A deductions; rather they show OBBBA’s four new deductions sit on Schedule 1‑A temporarily for 2025–2028 while Schedule A remains the vehicle for itemized deductions [3] [1]. Sources also do not provide complete final instructions for interaction between Schedule A and Schedule 1‑A because the schedules were draft and subject to IRS revision [1] [4].
7. Bottom line for filers and advisors
For 2025, expect Schedule A to continue unchanged in purpose and expect the new, draft Schedule 1‑A to handle the four OBBBA deductions (qualified tips, overtime, QPVLI, enhanced senior deduction); taxpayers and preparers must follow final IRS releases and be ready for transitional reporting quirks (W‑2 code timing, MAGI phase‑outs, deduction routing to Schedules C/E/F) that tax pros and the IRS have highlighted [3] [1] [2] [4].