03/16/2026
“The Big Beautiful Tax Bill Created New Deductions… But Most Taxpayers Have No Idea How To Claim Them.” 1. Lower Tax Rates Continue The bill makes the lower individual tax brackets permanent, preventing tax rates from increasing after 2025. Example: Without the bill, many taxpayers would have moved into higher brackets starting in 2026. 2. Bigger Standard Deduction The higher standard deduction from the 2017 tax reform is now permanent, meaning many taxpayers can reduce taxable income without itemizing deductions. This helps middle-income taxpayers the most. 3. Higher Child Tax Credit The Child Tax Credit increased to about $2,200 per child and is indexed for inflation going forward. This directly reduces the taxes families owe. 4. Larger SALT Deduction The state and local tax (SALT) deduction limit increased from $10,000 to $40,000 for many taxpayers through 2029. This is a major benefit for homeowners and taxpayers who itemize. 5. New Deductions for Workers Several new deductions apply through 2028: Overtime pay deduction up to $12,500 ($25,000 joint filers). Tips tax exemption on up to $25,000 for qualifying workers. Car loan interest deduction up to $10,000 for qualifying vehicles. 6. Extra Deduction for Seniors Taxpayers 65 and older can deduct an additional $6,000 of income (subject to income limits). 7. Larger Estate Tax Exemption The estate tax exemption rises to $15 million per person, allowing more wealth to pass tax-free. 8. Overall Tax Savings Estimates suggest the law will reduce taxes by about $3,800 on average per taxpayer in 2026. ✅ Simple summary: The bill helps taxpayers mainly by: Keeping tax rates lower Increasing deductions and credits Creating new tax breaks for workers, families, and seniors Here are 5 practical tax strategies taxpayers can use to save money under the “One Big Beautiful Bill”. 1. Claim the New Overtime Deduction If you earn overtime pay, you may now deduct up to: $12,500 (single) $25,000 (married filing jointly) 💡 Strategy: Track overtime separately on your pay stubs and make sure your tax preparer claims the deduction. Many taxpayers will miss this deduction if their preparer doesn’t ask about overtime. 2. Deduct Car Loan Interest Taxpayers can deduct up to $10,000 of interest on qualifying vehicle loans. 💡 Strategy: If you recently bought a vehicle for commuting or work purposes, keep your loan interest statement from the lender. For many middle-income taxpayers this could mean $1,000–$2,000 more deductions. 3. Take Advantage of the Higher SALT Deduction The state and local tax deduction cap increased to $40,000. 💡 Strategy: Homeowners should track: Property taxes State income taxes Local taxes Many homeowners who previously couldn’t itemize now can again, which may reduce taxes significantly. 4. Maximize the Larger Child Tax Credit Families can claim about $2,200 per child. 💡 Strategy: If your child turns 17 during the year, plan carefully because eligibility changes. Families with multiple children could see thousands in tax savings. 5. Seniors Get an Extra Deduction Taxpayers age 65+ receive an additional $6,000 deduction. 💡 Strategy: Some retirees may now be able to offset Social Security income or IRA withdrawals with this deduction. Simple Example A middle-income family could see savings like this: Child tax credits: $4,400 Overtime deduction tax savings: $1,000+ SALT deduction increase: $1,500+ Vehicle interest deduction: $500+ Total potential savings: $5,000–$7,000 in some cases. Marketing Angle for a Tax Office This topic is perfect for attracting new clients. If you have questions or need help filing your tax returns, give us a call we can help. Get a Free second look if you have already filed to make sure you received all the new deductions. Total Tax Service Inc 519 Main Street Towanda, PA 18848 570-268-0989 [email protected]
