One Big Beautiful Bill Act (P.L. 119-21)

Key Highlights

• Deduct Up to $25,000 in Tips
  Applies to tips received from 2025 to 2028.

• No Itemizing Required
  The deduction is available even if you take the standard deduction.

• Covers Cash & Card Tips
  Both payment types qualify, making it easier to maximize your savings.

• Jobs That May Qualify
  If your position regularly received tips before January 1, 2025, you may be eligible.
  The IRS will release a full list of qualifying jobs in October 2025.

• High-Income Limitations
  Some higher-income earners may see reduced savings under this deduction.
  
  

What You Need to Know:

This is a new law, and the IRS is expected to release detailed rules and eligibility guidelines later in 2025. Stay tuned for updates to ensure you’re taking full advantage of this benefit.

August 27th, 2025, Update- Qualifying Professions:

The Treasury Department has released a detailed list of occupations that customarily and regularly receive tips for purposes of the new “no tax on tips” provision under the One, Big, Beautiful Bill Act.

This list includes professions across:

• Food & Beverage Service (bartenders, waitstaff, baristas, bussers, etc.)

• Hospitality & Guest Services (bellhops, concierges, baggage porters, etc.)

• Entertainment & Events (musicians, dancers, DJs, casino dealers, ushers, etc.)

• Digital Content Creators (streamers, podcasters, social media influencers, etc.)
  
  

👉 View the full Treasury list of qualifying tipped occupations here: Treasury PDF – Tipped Occupations

Key Highlights

• No Itemizing Required: The deduction is available even if you take the standard deduction.

• Applies to W-2 Employees: Works for hourly employees receiving overtime pay.

• Covers Only Extra Overtime Pay: The deduction applies to earnings from time-and-a-half or higher beyond 40 hours per week.

• Potentially Big Savings: If you regularly work overtime, this deduction could mean thousands back in your pocket.

• High-Income Limitations: Some higher-income earners may see reduced savings under this benefit.

Deduction Limits

Married Filers: Up to $25,000

Single Filers: Up to $12,500

What You Need to Know

This is a new law, and the IRS will release detailed rules and eligibility requirements later in 2025. Check back here for updates to make sure you don’t miss out on this opportunity.

From 2025 through 2028, you may be able to deduct up to $10,000 per year in car loan interest — but only if your purchase meets specific requirements.

Deduction Details

• Maximum Deduction: Up to $10,000 per year

• Applies To: Personal-use vehicles only

Eligibility Requirements

To qualify for this deduction, your vehicle must:

• ✅ Be a new personal car — not used or leased

• ✅ Be assembled in the United States

• ✅ Be purchased after December 31, 2024

• ✅ Have the Vehicle Identification Number (VIN) reported on your tax return

Important Notes

• High-Income Limitations: Some higher-income earners may see reduced savings under this benefit.

• IRS Guidelines Coming Soon: Since this is a new law, the IRS will release more details and clarifications later in 2025.

Why It Matters

If you’re planning to buy a new car between 2025 and 2028, this deduction could save you thousands over the life of your loan — especially if you choose a vehicle assembled in the USA.

Deduction Details

• Single Filers (65+): Up to $6,000

• Married Couples (Both 65+): Up to $12,000

Key Highlights

• No Itemizing Required: You can claim this deduction even if you take the standard deduction.

• Automatic Savings: Lowers your taxable income without extra forms or calculations.

• Available to Itemizers & Non-Itemizers: Whether you itemize or not, you can still benefit from this deduction.

• Does Not Affect Social Security: Social Security benefits remain taxable under existing rules.

Why It Matters

This new deduction provides meaningful tax relief for older adults and retirees, helping seniors keep more of their income without impacting Social Security benefits.

Important Notes

• High-Income Limitations: Some higher-income earners may see reduced savings.

• IRS Guidelines Coming Soon: Since this is a new law, the IRS will release additional details and eligibility rules later in 2025.

Credit Details

• $2,200 per Qualifying Child: A valid Social Security Number (SSN) is required for both the parent and child.

• Up to $1,400 Refundable: You may receive up to $1,400 back, even if you owe no taxes.

• Permanent Tax Credit: This benefit is here to stay under the new law.

• Automatic Inflation Adjustments: The credit amount will increase over time to keep up with inflation.

How to Claim It

• File Form 8812 with your tax return to claim the credit.

• Make sure all Social Security information is accurate to avoid delays.

Why It Matters

This updated Child Tax Credit offers substantial financial relief for parents, providing a larger credit, refundable benefits, and yearly adjustments to help families keep up with rising costs.

Important Notes

• High-Income Limitations: Some higher-income earners may see reduced savings under phase-out rules.

• IRS Guidelines Coming Soon: More details and clarifications will be provided by the IRS later in 2025.

Starting in 2025, the cap on State and Local Tax (SALT) deductions is getting a major temporary boost, giving homeowners and taxpayers in high-tax areas a chance to save more on their federal taxes.

Deduction Details

• Tax Years Covered: 2025 through 2029

• New SALT Deduction Cap: Up to $40,000

• Married Filing Separately: Cap set at $20,000

• After 2029: The limit returns permanently to $10,000

Who Benefits Most

• Homeowners in high-property-tax states

• Taxpayers paying significant state and local income taxes

• Those who previously maxed out the $10,000 SALT limit

Key Highlights

• ✅ Bigger Deduction, Bigger Savings

• ✅ Applies to Both Income & Property Taxes

• ✅ Helps Offset Costs in High-Tax States

• ⚠️ High-Income Limitations Apply

• ⏳ This is a Temporary Tax Break — expiring after 2029

What This Means for You

For the next five years, homeowners and taxpayers in high-tax areas can deduct significantly more on their federal returns, creating potentially thousands in savings — but planning ahead is key before the cap drops back down.

Credit Details

• Maximum Credit: Up to $17,280 per child

• Partially Refundable: Get up to $5,000 back, even if you owe little or no tax

• Special Needs Adoptions: New rules make it easier to qualify for the full credit

Who Benefits

• Families adopting infants or older children

• Parents completing domestic or international adoptions

• Families adopting children with special needs

How to Claim It

• File Form 8839 with your tax return to claim the credit

• Keep documentation of adoption expenses and eligibility

Why It Matters

Adopting a child is a life-changing decision, and this enhanced credit provides meaningful financial relief to help cover costs and support families welcoming a new member.

Important Notes

• ⚠️ High-Income Limitations: Some higher-income earners may see reduced savings due to phase-out rules.

• 📌 IRS Rules Coming Soon: Since this is a new law, more details and clarifications will be provided by the IRS later in 2025.

What’s New

• Expanded K–12 Coverage:

You can now use 529 funds for:

• Books, tutoring, and testing fees

• Specialized therapies related to learning

• Higher K–12 Spending Limit: The annual limit doubles from $10,000 to $20,000 per year for K–12 expenses.

• Post-Secondary Opportunities:

Tax-free 529 withdrawals can now cover:

• Certificate programs

• Apprenticeships

• Career training programs

Why It Matters

This change gives families greater tax-free options to invest in their child’s education and future skills — from elementary school through career development.

Important Notes

• 📌 Effective Date: July 5, 2025

• ⚠️ IRS Rules Coming Soon: Since this is a new law, more details and clarifications will be provided by the IRS later in 2025.

What’s Ending

• Used Clean Vehicle Credit: Expires for purchases after September 30, 2025

• New Clean Vehicle Credit: Also ends after September 30, 2025

• Solar, Energy-Efficient Home & Clean Energy Credits: Expire for upgrades after December 31, 2025

Key Points to Remember

• ✅ No exceptions for contracts signed before these dates — the purchase or upgrade must occur before the deadlines.

• ✅ Plan ahead to maximize tax benefits and take full advantage of available credits.

• ⚠️ These credits can significantly reduce your tax bill when used strategically.

Why It Matters

Green tax credits can save thousands on vehicle purchases or home energy upgrades, but only if you act before the expiration dates. Proper tax planning ensures you don’t miss these opportunities.

Key Updates for 2025

• ✅ No Itemizing Needed: You can deduct disaster-related losses even if you take the standard deduction.

• ✅ Higher Deductible Per Loss: The minimum deductible increases from $100 to $500.

• ✅ No 10% Income Limit: You no longer need to exceed 10% of your income to claim the deduction.

• ✅ Retroactive Deduction Option: You may be able to deduct the loss on last year’s tax return to get your refund faster.

How to Claim It

• File Form 4684 with your tax return to claim disaster loss deductions.

• Keep documentation of damages and insurance coverage for IRS verification.

Why It Matters

These updates are a major improvement for taxpayers affected by disasters, helping families and property owners recover financially faster and reduce out-of-pocket losses not covered by insurance.

⚠️ IRS Rules Coming Soon: Since this is a new law, more details and clarifications will be provided by the IRS later in 2025.

Key Highlights

• 💥 Immediate 100% Deduction: Deduct the full cost of qualifying business assets in the year they are purchased — no need to spread depreciation over multiple years.

• 📅 Effective for Purchases After January 19, 2025: This bonus depreciation is now permanent.

• 🏭 Extra Incentives for U.S. Manufacturing: Investments in U.S. factories or manufacturing equipment starting construction between 2025–2028 can yield additional tax benefits through 2030.

Why It Matters

This update allows businesses to:

• Reduce taxable income immediately

• Improve cash flow for growth and expansion

• Incentivize investments in U.S.-made equipment and facilities

⚠️ IRS Rules Coming Soon: Since this is a new law, more details and clarifications will be provided by the IRS later in 2025.

What’s Changing

• Higher Deduction Limits: Deduct up to $2.5M right away.

• Phase-Out Threshold: Once spending exceeds $4M, the deduction begins to phase out and is completely eliminated at $6.5M.

• Bonus Depreciation Stacking: Businesses can combine Section 179 deductions with bonus depreciation for even greater savings.

Why It Matters

This expansion is designed to help businesses invest in growth by reducing taxable income and improving cash flow. Whether you're upgrading technology, expanding operations, or purchasing new equipment, planning ahead is key to maximizing these benefits.

Important Notes

• Review your 2025 business investment plans

• Talk with your tax advisor to create a strategy that maximizes deductions

⚠️ IRS Rules Coming Soon: Since this is a new law, more details and clarifications will be provided by the IRS later in 2025.

Key Updates

• 1099-K Thresholds: Starting 2026, you will only receive a 1099-K if you earn over $20,000 AND have more than 200 transactions — fixing the old $600 reporting rule.

• Other Business Payments (1099-NEC & 1099-MISC): Reporting thresholds increase to $2,000 starting in 2026 (up from $600).

• Inflation Adjustments: These thresholds will rise with inflation over time, keeping reporting requirements reasonable.

Why It Matters

• Fewer 1099 forms for many taxpayers

• Reduced paperwork and administrative hassle

• Simpler reporting for freelancers and small businesses

⚠️ IRS Rules Coming Soon: Since this is a new law, more details and clarifications will be provided by the IRS later in 2025.