The new law provides numerous tax-saving opportunities for individuals. Here are 10 prime examples.

Individual extenders. Many key provisions for individuals in the Tax Cuts and Jobs Act (TCJA) were scheduled to “sunset” after 2025. The OBBBA generally extends these provisions and makes them permanent. Thus, it preserves the current top tax rate of 37% (instead of reverting to 39.7%) and favorable changes for alternative minimum tax (AMT) purposes. Conversely, the new law permanently eliminates: • Personal exemptions • Mortgage interest deductions on home equity debt • Casualty loss deductions (except for certain disaster-area losses) • Miscellaneous expense deductions • Job-related moving expense deductions (except for active-duty military personnel).

Tip: The OBBBA restores a modified “Pease rule” reducing itemized deductions for 37% bracket taxpayers.

2. Standard deduction. The TCJA increased the standard deduction amounts with inflation indexing. Now it’s going up again in 2025 to $15,750 for single filers and $31,500 for joint filers.

3. Senior deductions. The new law provides an extra $6,000 deduction for someone age 65 or older for 2025–2028 ($12,000 for joint filers if each spouse qualifies). The deduction is claimed in addition to the usual deduction for folks 65 and older. But it’s phased out for a modified adjusted gross income (MAGI) above $75,000 for single filers and $150,000 for joint filers.

4. State and local taxes. The TCJA notoriously capped deductions for state and local tax (SALT) payments at $10,000 a year. But the OBBBA boosts the limit to $40,000 in 2025 and adds 1% per year until reverting to $10,000 in 2030. The cap is reduced by 30% of the amount by which MAGI exceeds $500,000, plus there’s a 1% increase in the threshold for 2026–2029.

5. Child Tax Credit. The law permanently increases the Child Tax Credit (CTC) for children under age 17. The maximum credit, scheduled to drop from $2,000 to $1,000 in 2026, is bumped up to $2,200, with indexing beginning in 2026. Furthermore, phase-out thresholds are increased to $200,000 for single filers and $400,000 for joint filers.

6. Car loan interest. In the past, interest paid on car loans has been treated as nondeductible personal interest. But the new law carves out a new deduction of up to $10,000 from 2025–2028 for interest paid on a car assembled in the U.S. and purchased after 2024.

7. Charitable deductions. Currently, only itemizers may deduct charitable donations. Under the OBBBA, non-itemizers can deduct up to $1,000 for single filers and $2,000 for joint filers. Tip: The new law also includes a new “floor” for itemizers based on 0.5% of taxable income.

8. Gratuities. The OBBBA provides an annual deduction of up to $25,000 on tips received by service industry workers from 2025–2028. The deduction begins to phase out at MAGI of $150,000 for single filers and $300,000 for joint filers. Tip: A Social Security number (SSN) is required to claim the deduction.

9. Overtime pay. Under the new law, an individual can deduct up to $12,500 a year for overtime pay received from 2025–2028. The deduction is doubled to $25,000 for joint filers if each spouse qualifies. But the deduction is phased out beginning at $150,000 of MAGI for single filers and $300,000 for joint filers. Tip: The IRS will issue guidance soon.

10. Trump accounts. The new law creates “Trump accounts” for children born from 2025– 2028. These accounts, which will function like IRAs, are funded with $1,000 from Uncle Sam. Tip: We will have more details in the next issue.