Four New Tax Deductions to Know
What the One, Big, Beautiful Bill Act (2025) means for workers and retirees — in plain English
The 2025 tax law created four brand-new deductions that run through 2028 — and notably, all four are available whether or not you itemize. Each has income phase-outs and fine print, but here is the plain-English map of who they help.
1 · The senior deduction (age 65+)
- An additional $6,000 deduction per person age 65 or older — $12,000 for a couple where both qualify — stacked on top of the existing extra standard deduction for seniors.
- Phases out above $75,000 of modified adjusted gross income ($150,000 joint).
- Planning angle: this deduction interacts directly with Roth conversion and withdrawal planning — the phase-out makes the *order* you draw income from accounts matter more, not less.
Maximum annual amounts for tax years 2025–2028 under the One, Big, Beautiful Bill Act; phase-outs reduce or eliminate each deduction above the MAGI thresholds shown. Hypothetical illustration for education only — not a recommendation or a prediction of results.
2 · Tip income deduction
- Up to $25,000 per year of qualified tips deductible for employees and the self-employed in occupations the IRS lists as customarily tipped.
- Phases out above $150,000 MAGI ($300,000 joint); certain service-business owners and their employees are excluded.
3 · Overtime deduction
- Up to $12,500 ($25,000 joint) of the premium portion of overtime pay — the 'half' in time-and-a-half — deductible when properly reported by your employer.
- Phases out above $150,000 MAGI ($300,000 joint).
4 · Car loan interest deduction
- Up to $10,000 per year of interest on a loan for a new, U.S.-assembled, personal-use vehicle, with the loan originated after December 31, 2024. Used vehicles and leases don't qualify.
- Phases out above $100,000 MAGI ($200,000 joint); the vehicle's VIN goes on your return.
New deductions change old answers — especially for retirees managing income around the senior deduction's phase-out. Bring last year's return to a complimentary review and we'll look at what the new law changes for you, alongside your CPA.
TALK IT THROUGH — COMPLIMENTARY REVIEW
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IMPORTANT INFORMATION
Provisions summarized from the One, Big, Beautiful Bill Act (Public Law 119-21, signed July 4, 2025), generally effective for tax years 2025 through 2028; eligibility rules, phase-outs, and reporting requirements apply and IRS guidance continues to evolve — confirm current details at irs.gov. This material is for educational purposes only and does not constitute individualized investment, tax, or legal advice, nor an offer or solicitation of any product or service. Rules and figures cited are subject to change — confirm current details with official sources and consult qualified professionals regarding your situation. Advisory services offered only where the firm and its representatives are appropriately registered or exempt. © 2026 Mountain View Wealth Management, LLC.
Provisions summarized from the One, Big, Beautiful Bill Act (Public Law 119-21, signed July 4, 2025), generally effective for tax years 2025 through 2028; eligibility rules, phase-outs, and reporting requirements apply and IRS guidance continues to evolve — confirm current details at irs.gov. This material is for educational purposes only and does not constitute individualized investment, tax, or legal advice, nor an offer or solicitation of any product or service. Rules and figures cited are subject to change — confirm current details with official sources and consult qualified professionals regarding your situation. Advisory services offered only where the firm and its representatives are appropriately registered or exempt. © 2026 Mountain View Wealth Management, LLC.