The recent updates in the Big Beautiful Bill are set to assist tipped workers, those working overtime, and senior citizens.
WASHINGTON — If you’ve been wondering, “Where’s the money?” your tax returns this year might just provide some answers.
This tax season introduces significant changes that have the potential to add some extra cash to your finances, thanks to the new deductions in the “Big Beautiful Bill” that became law last year.
Tax professionals suggest that these changes could have a meaningful impact.
“Not only are we expecting bigger refunds, but we’re also expecting better outcomes overall,” Mark Steber from Jackson Hewitt Tax Office noted.
Steber characterized this legislation as the most substantial tax overhaul in his four decades of experience. The new rules broaden deductions for various taxpayer groups for the first time, as confirmed by the IRS.
New Deduction for Tipped Income
Tipped employees, particularly within the service sector, can claim deductions of up to $25,000 from their eligible tip income. This could significantly lower the taxable income for many bartenders, servers, and hospitality workers.
Otvertime Pay Deduction
For those who receive overtime pay, there’s something to look forward to. The new law permits eligible workers to deduct up to $12,500 in overtime earnings, plus an additional tax credit for those who qualify.
Incentives for American-Made Vehicles
Taxpayers buying cars assembled in the United States in 2025 might be eligible for a credit.
“If you purchase a vehicle assembled in the U.S. in 2025 and finance it, you can deduct up to $10,000 from the loan interest,” Steber explained. “You don’t need to itemize but make sure to report this on your tax return.”
Additional Credits for Senior Citizens
Americans aged 65 and older can claim an extra $6,000 as a senior citizen credit, while married couples filing jointly may claim up to $12,000.
“This was implemented to alleviate some of the burdens from Social Security taxes,” Steber added. “Interestingly, you don’t need to actually receive Social Security to benefit from this new deduction.”
Many Refunds Already Distributed
According to early IRS filing data, the average tax refund so far this season is about 14% larger compared to last year, suggesting that these changes are already having a positive effect.
Tax experts recommend that taxpayers take a close look at the new deductions or seek advice from a tax professional to ensure they’re maximizing their benefits.
