A $6,000 "Senior Deduction" - Tax-Free Security for Most

"Will I still pay taxes on my Social Security?" For almost 9 in 10 seniors. the answer is now no. OBBB adds an extra $6,000 standard deduction per seniors 65+. MFJ seniors get $12,000 extra on top of their regular deduction. The result is 88% of social security recipients will owe zero federal tax on their benefits.

How it works:  If you're 65 * you automatically qualify for this bonus deduction starting with your 2025 tax return. In most cases Social Security benefits become fully tax-free. Even if you itemize , you still get this $6,000 per person on top.

Income Limit:  It begins to phase out once your income passes $75,000 (single) or $150,000 (couple).  For every dollar above those limits, the deduction shrinks by about a 6% phase out rate.

This senior deduction expires after 2028, unless congress extends it or makes it permanent later.

The OBBB raises the cap on state and local tax deduction (SALT) from 10,000 to $40,000 through 2028 for federal taxes.  This help people in high tax states, who itemize could deduct a lot more of their property taxes and state income taxes on their federal return now.

Income limit is $500,000 and it will revert back in 2029 if congress does not extending the law

Effective until 2028

Employees and self-employed individuals may deduct qualified tips they receive

Tips are reported on your W2, Form 1099 or on form 4137

Qualified tips include voluntary cash or charged tips received from customers, including shared tips.

Maximum annual deduction is $25,000.

For self-employed individuals, deduction cannot exceed net income (before this deduction) from the trade or business where tips were earned,

Phases out with modified AGI over $150,000 ($300,000 for joint filers).

Effective until 2028

Individuals may deduct the portion of qualified overtime pay that exceeds their regular rate of pay (the half portion of time and a half)

Overtime must be reported on your W2, 1099, or any statement furnished to the individual.

Maximum annual deduction is $12,500 ($25,000 for joint filers).

Effective until 2028

Individuals may deduct interest paid for personal use vehicle only (no business use) Lease payments do not qualify.

Vehicle must be new

Vehicle weights less than 14,000 pounds

Final assembly in the US.

No need to itemize to take the credit. (must include VIN)

Lender must file information returns with the IRS and provide statements to taxpayers showing the interest for tax year

Effective until 2029

Establish for an eligible child born form 1/1/2025 to 12/31/2028, US citizen

$1,000 will be deposit to their Trump Account by the government.

​Families can deposit up to $5,000 and employers up to $2,500 yearly tax free

The money will be placed in an investment account in the child's name. These accounts are meant to grow over time through low cost index funds.