2025–2028 Tax Relief Highlights -- One Big Beautiful Bill Act
No Tax on Tips
Eligible workers in IRS-listed tip-receiving occupations may deduct up to $25,000 annually in qualified tips (cash or charged) reported via W-2, 1099, or Form 4137.
- Applies to employees and self-employed individuals (subject to net income limits)
- Phases out at $150K MAGI ($300K for joint filers)
- Not available for Specified Service Trades or Businesses (SSTBs)
- Must include SSN and file jointly if married
- IRS to publish qualifying occupations list by Oct. 2, 2025
No Tax on Overtime
Workers may deduct overtime pay exceeding their regular rate (e.g. the "half" portion of time-and-a-half), up to $12,500 annually ($25,000 joint).
- Available to all individual filers
- Phases out at $150K MAGI ($300K joint)
- Requires SSN and joint return if married
- Employer reporting and IRS transition relief apply
No Tax on Car Loan Interest
Deduct up to $10,000/year in interest paid on loans used to buy new personal-use vehicles (not leased or used).
- Loan must be originated after Dec. 31, 2024 and secured by the vehicle
- Phases out at $100K MAGI ($200K joint)
- Applies only to original-use, personal vehicles
Deduction for Seniors (2025–2028)
Individuals age 65 and older may claim an additional $6,000 deduction—on top of the current senior standard deduction.
- Up to $12,000 total for married couples where both qualify
- Available to all taxpayers (itemizing or taking the standard deduction)
- Phases out at $75K MAGI ($150K for joint filers)
- Taxpayer must be age 65 by year-end
- Must include SSN of qualifying individual(s)
- Married couples must file jointly to claim