New Tax Benefits

Here’s a simple breakdown of the new tax benefits in the One, Big, Beautiful Bill Act, all available from 2025–2028.

1. No Tax on Tips

If you work in a job where tips are normally expected (based on the IRS list that will come out by Oct. 2, 2025), you can deduct up to $25,000 of reported cash or card tips.

• Self-employed workers can claim it too, but not if they’re in a “specified service trade or business” (SSTB).

• Employees whose employers are in an SSTB also don’t qualify.

• The deduction starts phasing out above $150k MAGI ($300k for joint filers).

• You must include your SSN and file jointly if married.

The IRS will give transition relief for 2025 as everyone adjusts to the new reporting rules.

2. No Tax on Overtime

You can deduct the “extra” part of your overtime pay — basically the half-rate portion of “time-and-a-half.”

• Max deduction: $12,500 ($25,000 for joint filers).

• Same phase-out rules as the tip deduction.

• SSN and joint filing required.

Employers will have new overtime reporting rules, with transition relief in 2025.

3. No Tax on Car Loan Interest

If you buy a new, personally used, U.S.-assembled vehicle after 12/31/24, you can deduct up to $10,000 of interest on the auto loan.

• Used cars and leases don’t qualify.

• Loan must be secured by the vehicle.

• You must list the VIN on your tax return.

• Phase-out begins at $100k MAGI ($200k joint).

4. Extra Deduction for Seniors

If you’re 65 or older, you get an extra $6,000 deduction ($12,000 if both spouses qualify).

• Phases out above $75k MAGI ($150k joint).

• SSN and joint filing required.