10 Tax Breaks Every Middle-Class Family Should Know for 2025

It is never too early to start planning for the next tax season. If you're a middle-class taxpayer who's planning to claim the standard deduction in 2026, there are lots of ways to further minimize your tax burden and keep more of your hard-earned money in your pocket.

To help you do that, we've compiled a list of 10 of the best tax breaks available to middle-class workers and their families for the 2025 tax year. Check these listings and determine which one(s) you may be eligible to claim today.

1. Child Tax Credit (CTC)

If you cared for dependents in 2025, then you may be eligible for the Child Tax Credit (CTC), which is worth up to $2,200 per qualifying child (with up to $1,700 of that being refundable).

• In order to be considered a qualifying dependent, children must have lived with you for more than half the tax year, be under the age of 17 by the end of the year and have a valid social security number issued before the tax return’s due date.
• If you are married and filing jointly, at least one spouse must have a valid social security number.

2. Family Tax Credit

What about families who have dependents that don't necessarily qualify for the CTC? In these cases, families may still want to look into the family tax credit for other dependents, which was established in 2017.

This credit allows taxpayers to claim up to $500 for each dependent, including adult dependents, for those with an income below $200,000 (for single filers) and $400,000 (for joint filers), and this credit may reduce your tax liability to zero, but will not result in a refund.

3. Adoption Credit

If you adopted a child in 2025, you may also be eligible for a significant tax credit. Specifically, the adoption credit allows families to offset some of the costs related to adopting a child, offering a maximum credit of $17,280 for each eligible child, with a portion of the credit being refundable up to $5,000. Any remaining non-refundable credit can be carried forward for up to five years.

This amount is adjusted for inflation each year and is available to families earning less than $299,190 per year.

4. Child and Dependent Care Credit

Did you have childcare expenses in 2025? If so, then you may be able to claim the child and dependent care credit, which is designed to help offset some of the costs related to securing childcare while a parent is working or actively looking for work.

Under this credit, families can claim up to $3,000 per child or $6,000 for two or more children, although the credit percentage, which ranges from 20% to 35% depends on your adjusted gross income (AGI) and amounts do begin to phase out for taxpayers who make just $15,000 per year.

5. Lifetime Learning Credit

If you returned to school to pursue additional skills in 2025, you might be eligible for the Lifetime Learning Credit (LLC), which allows you to claim up to $2,000 per tax return (or 20% of $10,000 of qualified education expenses).

• Some examples of qualified expenses include books, tuition and applicable fees (such as registration or enrollment fees).

6. American Opportunity Tax Credit

Another education credit you should be aware of if you (or any dependents) attended college in 2025 is the American Opportunity Tax Credit (AOTC). This credit allows you to claim a 100% deduction on the first $2,000 qualifying education expenses, as well as 25% of the next $2,000 for those with an income below $80,000 or less ($160,000 or less for married couples filing jointly).

• Unlike the Lifetime Learning Credit (LLC), however, it is worth noting that the AOTC can only be claimed during a student's first four years of higher education.

7.  Tip Income Deduction

If you work in a job where you regularly receive tips, then you should be aware of recent changes to taxes under the One Big Beautiful Bill Act (OBBBA). Specifically, OBBBA allows for a deduction of tips from taxable income for the tax years 2025 through 2028, allowing taxpayers to claim up to $25,000 of tips each tax year.

This can be an excellent way for tipped workers to reduce their tax burdens, although it's important to note that these tipped wages may still be subject to other taxes (like payroll and state income tax).

8. Overtime Income Deduction

Like tipped income, OBBBA has also created new rules when it comes to taxation on overtime income. Specifically, for many taxpayers receiving overtime wages, a temporary deduction will be available through 2028 that allows taxpayers to claim up to $12,500 (or $25,000 for joint filers) in overtime income.

This tax benefit is available to single filers with an income of less than $275,000 and jointly filing couples with an income of less than $550,000.

To qualify for the deduction, you must be: a non-exempt worker under the Fair Labor Standards Act (FLSA) and your overtime must be mandated by the FLSA for hours worked over 40 in a workweek. Exempt employees, who receive a salary regardless of hours worked, do not qualify. 

9. Student Loan Interest Deduction

If you paid interest on any student loans in 2025, be sure to claim a deduction on your taxes, assuming you meet certain qualification limits. Specifically, taxpayers can deduct up to $2,500 in student loan interest — although this amount is phased out for taxpayers who make more than $85,000 per year (or $170,000 for those filing jointly).

10. Car Loan Interest Deduction

You may also be eligible for a deduction if you paid interest on a car loan in 2025. Specifically, the car loan interest deduction introduced by OBBBA is worth up to $10,000, although amounts are phased out for those with an income of more than $100,000 (or $200,000 for those filing jointly).

• To be eligible, the vehicle must be new, personal use purposes, and final assembly in the U.S. with a secured loan originated after December 31, 2024.

Ready to Maximize Your Tax Savings?

Navigating the ins and outs of tax credits, deductions and other benefits can be complicated — especially if you don't have a strong background in tax law. However, by simply being aware of these common tax breaks for middle-class workers and how to claim them.

Ultimately, there are numerous ways to prepare your return and minimize your tax burden, and, of course, you can always consult an experienced tax professional if you need additional guidance.    

To learn more about LGT and how we can serve you, contact us here.