One Big Beautiful Bill Act Offers Major Tax Relief
- MyTAXPrepOffice Editorial Group
- Aug 8
- 1 min read
The IRS has rolled out game-changing tax updates for 2025–2028 under the newly enacted One Big Beautiful Bill Act (OBBBA), with a special focus on relief for seniors and working taxpayers.
Here's what's new and what to expect:
New $6,000 “Bonus Deduction” for Seniors Taxpayers age 65 and older can claim an additional $6,000 deduction on top of the standard senior deduction. For joint filers, that means up to $12,000 extra—subject to a phase-out above $75,000 (individual) and $150,000 (joint).
Deduction for Overtime Pay Taxpayers can deduct up to $12,500 (or $25,000 for joint filers) of qualified overtime compensation—effective 2025–2028—to help offset the tax burden on that extra income.
Auto Loan Interest Deduction Interest on loans for vehicles assembled in the U.S. is now deductible—up to $10,000 annually. Eligibility requires filing both itemizers and non-itemizers, with income phase-outs starting at $100,000 (individuals) or $200,000 (joint filers).
Tip Deduction (New for Tip-Based Workers) Those earning tips can deduct up to $25,000 annually (subject to income limits)—a win for hospitality and service professionals who have long felt unfairly taxed.
What This Means for 2026 Tax Filers (Tax Year 2025):
These provisions aim to reduce tax burdens for seniors, workers with overtime or tips, and drivers financing U.S.-made vehicles. Temperature check:
Seniors could see dramatically lower taxable income.
Overtime/tip workers get additional relief.
Auto buyers benefit from up-front cost reductions.
As always, these provisions are temporary (through 2028), and individual eligibility depends on income levels. Tax professionals should begin incorporating these into tax planning strategies now.
