One Big Beautiful Bill Act

This coming tax season will be an interesting one for sure. Two new deductions will keep things buzzing and give us a lot to discuss during your tax appointment. However, both deductions are limited to the “qualified” amounts. Not everyone with overtime will be entitled to the overtime deduction, and not everyone earning tips will receive the tips deduction. There are also income limitations so both deductions phaseout when income reaches the threshold. Those who do have qualified overtime and/or qualified tips may be able to exclude $12,500 and $25,000 from income so it’s definitely worth looking at. If you earned either in 2025, please be sure to provide me with your final pay stub of 2025.

Another much talked about item from the new law is the senior deduction. Originally touted as no tax on Social Security, it didn’t quite end that way. The senior deduction doesn’t reduce your adjusted gross income and does not affect the calculation of your taxable Social Security benefits at all. However, many seniors will enjoy an extra benefit of a $6,000 or $12,000 deduction that may reduce or eliminate the tax they would have otherwise paid. This deduction is also subject to phaseout based on income levels.

If you financed the purchase of a new vehicle in 2025 (not a used vehicle) be sure to include the sales receipt since we may be able to deduct the interest on your new car loan.

I’m looking forward to catching up with you this season and enlightening you on all the new tax laws that affect your particular situation.