OBBB Tax Savings Calculator
Calculate all four new tax deductions from the One Big Beautiful Bill Act in one place
We built this unified calculator from the One Big Beautiful Bill Act (signed July 4, 2025) so you can see all your potential OBBB deductions at once. Many taxpayers qualify for more than one.
How much can I save with OBBB deductions in 2025?
Under the One Big Beautiful Bill Act (2025-2028), the four new below-the-line deductions (claimed on Schedule 1-A) stack as follows: $25,000 tips + $12,500 overtime (single) / $25,000 overtime (MFJ) + $10,000 car loan interest + $6,000 senior deduction per person 65+. A theoretical maximum is $53,500 for a single 65+ filer who qualifies for all four, or $72,000 for an MFJ couple where both spouses are 65+ — but income phase-outs ($75K–$300K depending on deduction) mean most taxpayers qualify for only 1–2 at full value.
- •Tax years 2025 through 2028 (signed July 4, 2025)
- •Income phase-outs apply for high earners ($75K-$300K depending on deduction)
- •Deductions are additive—claim all that apply to you
- •Below-the-line Schedule 1-A deductions work with the standard deduction
What are the OBBB tax deductions for 2025?
The One Big Beautiful Bill Act (OBBB), signed July 4, 2025, created four new tax deductions for 2025-2028: Tips Deduction (up to $25,000), Overtime Deduction (up to $12,500/$25,000), Car Loan Interest Deduction ($10,000), and Senior Citizen Deduction ($6,000 per person 65+).
- Tips Deduction: Up to $25,000 for servers, bartenders, valets, and tipped workers
- Overtime Deduction: Up to $12,500 (single) or $25,000 (married) for hourly workers
- Car Loan Interest: Up to $10,000 for US-manufactured new vehicles
- Senior Deduction: $6,000 per person age 65+ (stacks with existing senior deduction)
Source:IRS FS-2025-03
OBBB (One Big Beautiful Bill) bundled several 2025 tax changes that move the needle for working families — no tax on tips and overtime up to caps, expanded senior deduction, restored 100% bonus depreciation. The catch: most provisions phase out by income and many sunset in 2028.
Real-world scenario
Server earning $48K with $22K in reported tips
Under OBBB, qualified tips earned in a Treasury-listed tipped occupation are deductible up to $25,000 from federal taxable income (still subject to FICA). On 2026 W-2s the qualified-tip total appears in Box 12 code TP with the occupation code in Box 14b; for 2025 it is substantiated from pay records. Her $22K in tips drops federal taxable income from $54,250 to $32,250 after the $15,750 standard deduction (AGI is unchanged: this is a below-the-line deduction). $5,775 of the cut comes out of the 22% bracket and $16,225 out of the 12% bracket, so as a single filer she saves about $3,218 in federal income tax for 2025 ($2,990 for 2026: $53,900 → $31,900), but still owes $1,683 in FICA on those tips.
The part most people miss
The tip and overtime deductions are below-the-line (Schedule 1-A) and don't reduce FICA wages — Social Security and Medicare still hit. Workers get excited about 'no tax on tips' and forget about the 15.3% (employer+employee) payroll tax. The real benefit is federal income tax only, and only up to the cap.
Your Total OBBB Tax Savings
$0
Total Deductions
$0
Taxable income $59,250 → $59,250 · top rate reached 22.0%
Your Basic Information
Savings use the 2025 brackets and standard deduction. OBBB deductions apply 2025-2028.
Tips Deduction
Up to $25,000
Tick if your tips come from an occupation on the Treasury list of tipped occupations (the specified-service-business rule is on hold under IRS Notice 2025-69 for 2025 and 2026). Married? You must file jointly.
Overtime Deduction
Up to $12,500 / $25,000
Tick if you are paid overtime the Fair Labor Standards Act requires (over 40 hours a week). Only the extra half counts. Married? You must file jointly.
Car Loan Interest
Up to $10,000
Senior Deduction (65+)
$6,000 per person
Need More Details?
Use our dedicated calculators for detailed eligibility checks and comprehensive analysis:
Frequently Asked Questions
Sources & References
Primary references used for this content
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Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.