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One Big Beautiful Bill Act:

Below are descriptions of new provisions from the One Big Beautiful Act, signed into law on July 4, 2025.New Tax Deductions for 2025–2028
​1.No Tax on Tips
Employees and self-employed workers in tip-based jobs can deduct up to $25,000 of qualified tips per year. Tips must be reported on W-2, 1099, or IRS Form 4137. Deduction phases out for incomes over $150,000 ($300,000 joint).
Excludes Specified Service Trades or Businesses (SSTBs).
2. No Tax on Overtime
Workers can deduct the “extra” portion of overtime pay (above regular wages) up to $12,500 per year ($25,000 for joint filers). Applies to FLSA-required overtime and phases out over $150,000 ($300,000 joint).
3. No Tax on Car Loan Interest
Deduct up to $10,000 per year in interest on personal-use auto loans (new vehicles only). Vehicle must be U.S.-assembled and under 14,000 lbs. Phases out over $100,000 ($200,000 joint).
Used vehicles and leases don’t qualify.
4. New Deduction for Seniors
Taxpayers 65 and older get an extra $6,000 deduction ($12,000 if both spouses qualify), in addition to the regular senior standard deduction. Phases out over $75,000 ($150,000 joint).
Eligibility Notes (All Deductions):
  • Available to both itemizers and non-itemizers
  • Must include Social Security Number
  • Joint return required if married
  • New IRS reporting rules apply starting 2025
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