One Big Beautiful Bill Act

Tax Changes

Enhanced Deduction for Senior

• Effective for 2025 through 2028, individuals who are 65+ may claim an additional deduction of $6,000 per individual ($12,000 total for a married couple where both spouses qualify). This new deduction is in addition to the current additional standard deduction and for both itemizing and non-itemizing taxpayers.

Car Loan Interest Deduction

• Effective for 2025 through 2028, qualifying taxpayers may deduct up to $10,000 per year for new, qualifying vehicles.

No Taxes on Overtime Deduction

• Effective for 2025 through 2028, the OBBBA introduces a deduction for qualified overtime pay, meaning overtime income won’t be taxed the same way as regular wages. This is designed to boost take-home pay for hourly and salaried workers.

Child Tax Credit Expanded

• The Child Tax Credit was set to default to $1,000 after 2025, however, the OBBBA increased the Child Tax Credit to $2,200 for every qualifying child starting in 2025. The credit amount will be adjusted annually for inflation starting in 2026.

No Taxes on Tip Deduction

• Effective for 2025 through 2028, qualifying taxpayers may deduct tips up to $25,000 per year. This deduction applies to those making less than $150,000 ($300,000 for joint filers).

Increased State and Local Tax Deduction (SALT)

• The $10,000 SALT deduction limit was set to expire in 2025, however the OBBBA increased the cap to $40,000 for 2025 for those with incomes up to $500,000. This increased cap will rise by 1% annually through 2029 and default back to $10,000 in 2030.