A Few Things to Know About the One Big Beautiful Bill
The One Big Beautiful Bill, signed into law on July 4, 2025, touched a lot of corners of the tax code. Rather than try to cover everything, here are the pieces that are most likely to actually affect your return.
No Tax on Tips
If you work in an occupation where tipping is customary, you can now deduct up to $25,000 of qualified tip income for tax years 2025 through 2028. The deduction phases out once your income passes $150,000 (single) or $300,000 (married filing jointly), and it’s not available if you file married filing separately. Your tips still need to show up on a W-2, 1099, or be reported on Form 4137, so good recordkeeping from your employer matters here.
No Tax on Overtime
Similar idea, different number. You can deduct up to $12,500 of qualified overtime pay if you’re single, or $25,000 if you’re married filing jointly, also for 2025 through 2028, with the same income phaseout thresholds as the tips deduction.
A Bigger Deduction for Seniors
If you’re 65 or older, there’s a new $6,000 deduction on top of your regular standard deduction, again running through 2028, phasing out starting at $75,000 of income for single filers and $150,000 for joint filers.
A Much Higher SALT Cap
The state and local tax deduction cap went from $10,000 to $40,000 starting in 2025, with annual adjustments through 2029 and a phase-down for higher earners.
The QBI Deduction Is Now Permanent
The Qualified Business Income deduction — the 20% deduction available to a lot of pass-through business owners, sole proprietors, partners, and S corp shareholders — was set to expire after 2025 and is now locked in for good, with a new minimum deduction of $400 added for smaller qualifying businesses.
A Bigger Child Tax Credit
It moved up from $2,000 to $2,200 per qualifying child, with inflation adjustments starting in 2026.
Car Loan Interest
If you took out a loan after December 31, 2024 to buy a personal-use vehicle, you can deduct up to $10,000 of the interest, through 2028, with a phaseout starting at $100,000 of income (single) or $200,000 (joint).
Don’t Forget QSBS
And if you’re an investor or startup founder, don’t skip the QSBS changes either — they’re significant enough to warrant their own dedicated post.
What’s Permanent, What’s Not
None of these provisions are permanent except the QBI deduction, the standard deduction levels, and the QSBS changes. The rest sunset after 2028 unless Congress acts again. If any of these apply to you, it’s worth factoring the expiration into your longer-term planning rather than assuming the rules stay put.
Disclaimer: This article is for general informational purposes only and is not tax or legal advice. Consult a CPA for guidance specific to your situation.
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