One Big Beautiful Bill Act

No Tax on Overtime:

Under OBBBA, from 2025-2028, qualifying workers can deduct up to $12,500 of eligible overtime if Single or $25,000 if Married Filing Jointly on their federal return. However, there are income limits, with the deduction phasing out for higher-income taxpayers, around $150,000 for Single and $300,000 for Joint filers.

No Tax on Tips:

Qualified tips can be claimed as an above-the-line deduction, whether you itemize or take the standard deduction. The deduction phases out for Single filers with income above $150,000 and for Joint filers above $300,000. Eligible tips include voluntary cash payments, such as cash, checks, electronic payments, or casino chips received directly from customers or through tip-sharing. Non-cash items, like meals or event tickets do not qualify. For a full list of eligible occupations, visit the IRS website.

65+ Deduction:

Taxpayers qualify if they turn 65 by December 31st of the tax year. This additional above-the-line deduction provides a federal income tax deduction of $6,000 per qualifying individual age 65 or older, effective for tax years 2025-2028. This deduction phases out for modified adjusted gross income above $75,000 for Single filers, and $150,000 for Joint filers.

Car Loan Interest:

This deduction applies to interest on loans originated after December 31, 2024 and is available regardless of itemizing or taking the standard deduction. It phases out for modified adjusted gross income over $100,000 for Single or $200,000 for Joint. Vehicles must be new and for personal use only, with final assembly in the United States and gross vehicle weight under 14,000 pounds.

Trump Accounts:

Trump Accounts are new tax-advantaged savings and investment plan for U.S children born between January 1, 2025 and December 31, 2028. Each eligible child receives a one-time $1,000 federal government contribution. Parents or guardians may open a Trump Account, allowing annual personal contributions of up to $5,000, plus up to $2,500 per year in employer contributions for each eligible employee or dependent. Earning grow tax-deferred until withdrawn, and contributions become tax-deductible when the child turns 18.