One Big Beautiful Bill Changes

  1. New Standard Deductions:
    1. Single / Married Filing Separately (MFS): $15,750
    2. Head of Household (HOH): $23,625
    3. Married Filing Joint: $31,500
  2. Senior Deductions:
    1. Deduction is up to $6,000 for individuals age 65 and older. “Up to” means the deduction is phased out if income exceeds $75,000 for Single or $150,000 for Married Filing Joint. If both spouses are over 65 and income is under $150,000, each may qualify for up to $6,000.
    2. Notes:
      1. A notice stated that Social Security income would not be taxable; this is not correct.
      2. To receive the deduction, married individuals must file Married Filing Joint. Married Filing Separately will not qualify.
  3. Car Loan Interest Deduction:
    1. Up to $10,000 per tax year. Does not lower AGI, but does reduce taxable income and is not an itemized deduction.
    2. Loan must be originated after 12/31/2024.
    3. Income limits: $100,000 / $200,000.
    4. Final vehicle assembly must be in the USA.
    5. Original use must begin with the taxpayer; the vehicle must be new as of 2025.
    6. Married filers do not need to file Married Filing Joint to receive the deduction.
  4. No Tax on Tips:
    1. Up to $25,000 deduction total (combined $25,000 for Married Filing Joint).
    2. Married taxpayers must file Married Filing Joint; Married Filing Separately does not qualify.
    3. Income limits: $150,000 / $300,000, then adjusted based on income.
    4. Does not reduce AGI, but does reduce taxable income.
    5. Qualified tips only.
    6. For 1099 workers, year-end pay statements are required (Uber, Lyft, Instacart, etc.).
    7. If 1099 without statements, the taxpayer must provide tip-out amounts. Tips cannot exceed business income.
    8. Must be from industries eligible for tips.
  5. Overtime Deduction:
    1. $12,500 for individuals and $25,000 for Married Filing Joint.
    2. Income limits: $150,000 / $300,000.
    3. Married taxpayers must file Married Filing Joint. Married Filing Separately does not qualify unless legally separated.
    4. The deduction applies only to the differential amount of overtime.
  6. Qualified Disaster Losses:
    1. $500 disaster deduction (not subject to the 10% AGI floor).
    2. Disaster must be declared by the President.
    3. Individuals affected by the LA fires qualify for the $500 disaster deduction even if they do not itemize.
  7. Child Tax Credit:
    1. $2,200 total credit, with $1,400 refundable.
  8. Green New Deal (Energy Credit):
    1. All vehicle credits end for cars acquired after September 30, 2025. The vehicle must be acquired before September 30, 2025.
    2. Home solar installations must be completed and installed before 12/31/2025.