The One Big Beautiful Bill Act

Chad Dickinson • July 18, 2025

New 2025 Tax Deductions for Workers, Drivers, and Retirees


On July 4, 2025, the “One Big Beautiful Bill Act” (Public Law 119-21) was signed into law—and it’s delivering some major tax benefits to everyday Americans. Whether you earn tips, work overtime, just bought a car, or are over 65, this law has something for you. Here’s a breakdown of the four big deductions now available for tax years 2025 through 2028.


1. “No Tax on Tips” Deduction – Up to $25,000


If you work in a tipped profession—like hospitality or personal services—you may now deduct up to $25,000 in qualified tips received each year.


Who qualifies:

  • Employees and self-employed individuals in industries that regularly receive tips (to be listed by the IRS).
  • Tips must be reported on a W-2, 1099, or IRS Form 4137.
  • Deduction is available even if you don’t itemize.

Key restrictions:

  • Phase-out begins at $150,000 AGI ($300,000 for joint filers).
  • SSTB (Specified Service Trade or Business) owners and employees do not qualify.
  • Must include your SSN and file jointly if married.

IRS will release an official list of qualifying tip-based occupations by October 2, 2025.


2. “No Tax on Overtime” Deduction – Up to $12,500 ($25,000 Joint)

Working overtime just got more rewarding. You can now deduct the “extra pay” portion of your time-and-a-half—the half portion over your regular rate of pay required by the Fair Labor Standards Act (FLSA).


Who qualifies:

  • Any worker paid qualified overtime reported on W-2 or 1099.
  • Deduction allowed for both itemizing and standard deduction filers.

Key restrictions:

  • Phase-out starts at $150,000 AGI ($300,000 joint).
  • Must include SSN and file jointly if married.

Employers must report overtime payments to both the IRS and employees.


3. Car Loan Interest Deduction – Up to $10,000

Bought a car for personal use in 2025? You may be able to deduct up to $10,000 in interest paid on a qualifying auto loan.


What counts:

  • Loan must be for a brand new vehicle (original use must start with you).
  • Car must be for personal use only.
  • Vehicle must be assembled in the U.S., weigh under 14,000 lbs, and include a VIN on your tax return.
  • Deduction applies whether or not you itemize.

Key restrictions:

  • Phase-out starts at $100,000 AGI ($200,000 joint).
  • Leases do not qualify.
  • Used cars do not qualify.


4. Senior Deduction – $6,000 per Person

Taxpayers age 65 or older get a brand-new deduction of $6,000—on top of the standard senior deduction that already exists.


Who qualifies:

  • Anyone age 65+ by year-end.
  • Claim up to $12,000 per couple if both spouses qualify.
  • Available to both itemizers and non-itemizers.

Key restrictions:

  • Phase-out begins at $75,000 AGI ($150,000 joint).
  • Must provide SSNs for all qualifying individuals.


Final Thoughts: A Rare Taxpayer Win

The “One Big Beautiful Bill Act” offers real savings to working Americans, service industry professionals, overtime earners, vehicle buyers, and retirees. Whether you itemize or take the standard deduction, these new provisions can lower your taxable income and increase your refund potential.

Be sure to talk to a tax professional and keep good records—employers, lenders, and individuals will all be required to file reports for many of these deductions.


Need help understanding how these changes apply to your tax situation? Contact Arch Tax for personalized guidance.

Tax Tip: Donating After A Disaster
By Chad Dickinson September 12, 2025
Learn how to safely donate after a disaster, avoid charity scams, and make sure your contributions are tax deductible with these IRS-backed tips.
Arch Tax Logo
By Chad Dickinson September 5, 2025
Wondering how long an IRS Offer in Compromise takes? Learn the step-by-step OIC timeline, what slows it down, and how to speed up your chances of approval.
Escape your ex's IRS debt
By Chad Dickinson August 29, 2025
Learn how Innocent Spouse Relief can erase IRS debt caused by your spouse.
Arch Tax Logo
By Chad Dickinson August 20, 2025
Learn how to talk to the IRS with confidence. Discover what to say, what to avoid, and how a tax attorney can protect your rights and negotiate on your behalf.
By Chad Dickinson August 15, 2025
You trust your tax preparer with some of your most sensitive personal and financial information. But what happens if scammers target them—and end up with your data? Unfortunately, there’s a real scam going around that does exactly that. Here’s how it works and how you can protect yourself. The Scam in Action Criminals send fake emails to tax preparers, pretending to be from the tax software company the preparer uses. These emails ask the preparer to “verify” their Electronic Filing Identification Number (EFIN) —a number the IRS uses to identify legitimate tax businesses. The email tells them to send the EFIN information by fax. If the preparer falls for it, scammers can use that EFIN to file fake tax returns in clients’ names—claiming fraudulent refunds. Why This Matters to You If your preparer’s EFIN is stolen, scammers could: File a fake return using your personal information Claim your refund before you do Cause IRS delays and red flags on your account Make it harder and slower for you to get your real refund Signs of Trouble Here are a few warning signs that could mean your personal tax information was compromised: You try to e-file and the IRS says a return has already been filed under your name You get a letter from the IRS about a tax return you didn’t file You receive unexpected tax documents in the mail What You Can Do You can’t stop scammers from targeting tax professionals, but you can take steps to protect yourself: Ask your preparer how they protect client data — A good tax pro will use secure portals and never send sensitive info over unencrypted email. Consider getting an IRS Identity Protection PIN (IP PIN) — This is a 6-digit number that prevents anyone from filing a return in your name without it. Act quickly if you suspect fraud — Contact your tax preparer, report it to the IRS, and follow their steps to secure your account. Bottom Line The EFIN scam targets tax preparers, but it’s taxpayers who can suffer the consequences. By choosing a preparer who takes security seriously—and staying alert to signs of fraud—you can greatly reduce your risk. If you think your information may have been compromised or want help setting up extra IRS protections, contact Arch Tax today . We’ll help you secure your account and make sure your tax return is filed safely and accurately.
By Chad Dickinson August 8, 2025
If you filed for an extension, your new tax deadline is October 15, 2025 . That gives you a little extra time — but not much — to get everything in order. Many taxpayers in your shoes consider hiring a professional to help finish the return. But here’s the catch: Not all tax preparers are created equal.  Some are helpful pros. Others? Not so much. Choose the wrong one, and you could risk your refund — or worse, find yourself in a mess with the IRS. Here are the biggest red flags to watch out for when choosing a tax preparer: 1. They Promise Bigger Refunds Than Everyone Else If someone claims they can get you a “huge refund” before they’ve even looked at your documents, that’s a giant red flag. A legitimate preparer doesn’t make promises until they’ve seen the facts. 2. They Want Your Refund Deposited into Their Bank Account Never agree to this. Your refund should be deposited directly into your bank account — not theirs. This is a shady tactic some preparers use to skim fees or delay payments. 3. They Won’t Sign the Return By law, paid preparers must sign your return and include their Preparer Tax Identification Number (PTIN) . If they refuse? Walk away. 4. They Don’t Ask for Records or Receipts Good tax pros ask a lot of questions and request documentation. If someone is willing to prepare your return based only on a pay stub or vague guesses, that’s a problem. 5. They Base Their Fee on Your Refund Size A preparer who charges a percentage of your refund has a financial incentive to fudge the numbers. Reputable pros charge flat or hourly fees — not a cut of your return. 6. They Can’t Be Reached After Tax Season What happens if the IRS sends you a notice in December? Make sure you’re working with someone who’s available year-round — not just from January to April. What You Should Look For A valid PTIN IRS e-file access Transparency in pricing Willingness to review the return with you Available to answer questions even after October Final Tip: You Are Still Responsible No matter who prepares your return, you are legally responsible for what gets filed. Don’t sign a return you haven’t reviewed — and never sign a blank one. Need Help You Can Trust? At Arch Tax, we pride ourselves on transparency , ethics , and experience . We’ve helped hundreds of clients meet their tax deadlines — without the red flags. Let’s make sure your return gets filed right. Schedule a free consultation today!
What happens if i get audited
By Chad Dickinson July 31, 2025
Worried about getting audited? Learn what happens if the IRS audits you, why it happens, and how Arch Tax can guide you every step of the way—with expert support and real results.
Arch Tax
By Chad Dickinson July 25, 2025
The October 15th tax extension deadline is almost here. Learn key filing tips, payment options, and how to get tax relief if you owe. Don’t wait—get expert help today.
Arch Tax Logo
By Chad Dickinson July 11, 2025
Discover key insights from the 2024 IRS Research Bulletin, including smarter audits, data-driven tax enforcement, and efforts to simplify filing. Stay ahead of upcoming changes in tax administration.
Inside the IRS: Key Stats and Surprises from 2024
By Chad Dickinson July 3, 2025
The IRS just released its 2024 Data Book—and it’s packed with record-breaking stats. View them in our article.