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One Big Beautiful Bill Act

What You Need to Know About the One Big Beautiful Bill Act in 2026

On July 4, 2025, the President signed the new 2025 Tax Bill, known as the One Big Beautiful Bill Act or OBBB. There are tons of rumors going around about what changes and what doesn’t, but here is the correct information that will affect you and most Americans.

New Deductions (No Itemizing Required)

Car Loan Interest Deduction

  • For new (not used) cars purchased in 2025–2028 and assembled in the U.S.
  • Deduction cap at $10,000.
  • Phases out at $100,000 (single) or $200,000 (joint).

Tip Income Deduction

  • Deduct the lesser of tip income on your W-2 or $25,000.
  • Phases out at $150,000 (single) or $300,000 (joint).

Overtime Deduction

  • Deduct the lesser of overtime income on W-2 or $12,500 per person.
  • Phases out at $150,000 (single) or $300,000 (joint).
Tax Credits

Child Tax Credit

  • Increased from $2,000 to $2,200 per child dependent.
Final Tips
  • Review your income thresholds to plan for any phaseouts.
  • Consider bundling deductions or accelerating expenses if nearing a phaseout limit.
  • Keep documentation for all deductions and credits claimed.
Next Steps

We can help you plan for any major tax events such as these law changes, retirement, home sales, inheritance, and many other tax matters.

Please do not hesitate to reach out via e-mail at Jennifer@nsocpa.com to schedule an appointment.

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