& TAX SERVICE

ONE BIG BEAUTIFUL BILL ACT OF 2025
(July 2025) The passage of this act puts it into effect immediately. Here is a rundown of its provisions:
 “No Tax on Tips”

• Effective for tax years 2025-2028 employees and self-employed individuals may deduct tips from occupations listed by the IRS as “customarily and regularly receiving tips”. The IRS will publish this list by Oct 2, 2025.

• Maximum annual deduction is $25,000 

• For self-employed persons, the deduction may not exceed the net income (without regard to this deduction) from the trade/business tips were earned.

• For Single filers, the deduction starts phasing out when MAGI is over $150,000 ($300,000 for joint filers)

• You do not need to itemize deductions to claim this deduction!

Ineligible filers:

• Those filing Married Filing Separate

• Self-employed individuals in a Specified Service Trade or Business under section 199A

• Employees of an SSTB under section 199A

“No Tax on Overtime”

• Effective for tax years 2025-2028 individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay (i.e. the “half” portion of “time-and-a-half” pay) that is required by the FLSA and that is reported on a Form W-2 or Form 1099 or other specified statement furnished to employee.

• Maximum annual deduction is $12,500 ($25,000 for MFJ)

• For Single filers, the deduction starts phasing out when MAGI is over $150,000 ($300,00 for MFJ)

• You do not need to itemize deductions to claim this deduction!

Ineligible filers:

• Those filing Married Filing Separate

“No Tax on Car Loan Interest”

• Effective for tax years 2025-2028 individuals may deduct interest paid on a loan used to purchase a qualified vehicle.

• Maximum annual deduction is $10,000

• For Single filers, the deduction starts phasing out when MAGI is over $100,000 ($200,000 for MFJ)

• The loan must have originated after Dec 31, 2024 AND have been for a new personal vehicle (the taxpayer must be the 1st user of the vehicle) AND be secured by a lien on the vehicle

• Vehicle must be a car, minivan, van, SUV, truck or motorcycle, with a GVWR of less than 14,000 pounds, and had its final assembly in the U.S.

• VIN must be reported on tax return each year deduction is claimed

• You do not need to itemize deductions to claim this deduction!

• If a qualifying vehicle is later refinanced, interest paid on the refinanced amount is generally eligible

Ineligibility:

• Lease payments

• Vehicles purchased for business / commercial use

• Loan that originated prior to January 1, 2025

• Used vehicles, regardless of purchase date

• Vehicles with a GVWR of 14,000 or more

• Vehicles that did not have their final assembly within the U.S.

“Deduction for Seniors”

• Effective for tax years 2025-2028 seniors 65 or older may claim an additional deduction of $6,000, which is in addition to the current standard deduction for seniors.

• Deduction is $12,000 if both spouses are 65 or older and MFJ

• Each taxpayer must be 65 years old on Dec 31 of the taxable year

• For Single filers, the deduction starts phasing out when MAGI is over $75,000 ($150,000 for MFJ)

• You do not need to itemize deductions to claim this deduction!

Ineligible filers:

• Those filing Married Filing Separate