New Tax Deductions for Tips, Overtime, Car Loans

0:00This is Corey with Tepa Bay News today, powered by the Daily News Now. The IRS just released new filing instructions for taxpayers looking to claim deductions on tips, overtime pay, car loan interest, and more under the One Big Beautiful Bill Act. For the 2025 Tax Year, these brakes let workers skip taxes on qualified tips up to $25,000 a year, and over time up to $12,500 if single or $25,000 for joint filers. Phaseouts kick in for higher earners, starting at a modified adjusted gross income over $150,000 for singles or $300,000 for couples filing jointly. This aims to put more money back in the pockets of service workers and hourly employees who often rely on those extra earnings. Taxpayers can now also deduct interest on car loans for passenger vehicles, whether they take the standard deduction or itemize. Seen years born before January 2nd, 1961, get an extra $6,000 deduction, but

1:03marry couples need to file jointly and have. Valid social security numbers. These perks come via brand new Schedule 1A, tucked into the Form 1040 instruction booklet. The IRS says this makes it straightforward to grab the savings when filing next year. Meanwhile, officials are pushing everyone to file electronically with direct deposit for quicker refunds and fewer mistakes, since the software handles the math and catches errors up front. Support for this episode comes from our sponsor, see the description. Your pillow, your podcast, your moment made for listening in bed, S-O-L-I, solely pillow.com.