Tax Updates from One Big Beautiful Bill Act (OBBBA)

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. These updates may impact your refund, withholding, or planning for the year ahead.

Below is a summary of the most relevant changes for individual taxpayers:

1. Additional Deduction for Seniors

From 2025 - 2028, taxpayers age 65 and older may claim an additional $6,000 deduction per eligible individual, on top of the standard deduction.This benefit phases out at:

• Adjusted Gross Income (AGI) over $75,000 (single)

• AGI over $150,000 (joint)

  
  

2. SALT Deduction Limit Increased

The State and Local Tax (SALT) deduction cap has increased from $10,000 to $40,000 beginning in 2025. Phaseout begins at AGI over $500,000, and drops back to $10,000 once AGI exceeds $600,000.

3. No Tax on Tips

From 2025 - 2028, taxpayers may deduct up to $25,000 of tips from taxable income. Phaseout thresholds:

• AGI over $150,000 (single)

• AGI over $300,000 (joint)

  
  

4. No Tax on Overtime

From 2025 - 2028, a portion of overtime pay is deductible:

• Up to $12,500 (single)

• Up to $25,000 (joint)

Phaseout begins at the same AGI thresholds as the tip deduction.

5. Car Loan Interest Deduction

From 2025 - 2028, taxpayers may deduct up to $10,000 of interest on qualifying personal use vehicle loans for vehicles purchased after 12/31/24. Phase Out begins at:

• AGI over $100,000 (single)

• AGI over $200,000 (joint)

Eligible vehicles must weigh under 14,000 lbs and be assembled in the United States. The deduction includes cars, SUVs, vans, pickups, and motorcycles.

6. Clean Vehicle Tax Credit Expiration

Federal clean vehicle credits expire for new and used EVs purchased after 9/30/25.

7. Home Energy Credit Expiration

Home and residential energy efficiency credits expire for expenditures made after 12/31/25.

As these changes from the One Big Beautiful Bill Act begin to roll out, having a CPA in your corner can make all the difference. If you are unsure how these updates affect your filing, deductions, or your overall tax picture, I'd be happy to discuss.