Summary
The IRS has announced major updates to federal tax deductions following the passage of the One, Big, Beautiful Bill Act. These changes aim to provide tax relief for individuals, families, and businesses starting this year.
Key Facts
- The IRS has introduced changes including a 100 percent bonus depreciation for certain properties.
- A new tax deduction is available for car loan interest on eligible vehicles made in America.
- The standard deduction will increase in tax year 2026 to $32,200 for couples, $16,100 for singles, and $24,150 for heads of households.
- Tipped employees can now deduct up to $25,000 in tips per year, subject to income limits.
- Overtime pay exceeding regular pay can be deducted up to $12,500, with income phase-out limits.
- Seniors aged 65 and above can claim an additional tax deduction, subject to income limits.
- Various other deductions and credits have been expanded or introduced under the new law.
