The Big Beautiful Bill…interesting name for a tax bill, right? I’ve researched the five most talked-about topics concerning this bill. Today I am going to cover these top 5 topics hot topics from my perspective as a CPA.
1. No Tax on Tips
This is the one everyone’s talking about. So what does “No Tax on Tips” actually mean? Unlike many deductions, there’s no income limit—so it doesn’t phase out at higher incomes. If you’re a server or work in an industry where tips are part of your pay, you can exclude $12,500 (single) or $25,000 (married) from your taxable income.
Keep in mind, payroll taxes still apply. Both you and your employer will pay Social Security and Medicare taxes on your tips, and these will be withheld automatically. The tips will show up on your W-2, and you’ll then claim the deduction.
Here is a practical example of how this works: if you made $6,000 in tips and earned $46,000 total, you’ll deduct $6,000 on your tax return. That leaves you with $40,000 in taxable income.
If you receive tips in cash, you’ll likely have to report them on a new form at the end of the year. You’ll still owe Social Security and Medicare taxes, but you’ll still get the exemption. Reporting tips on your W-2 is best, because then your employer covers their share of payroll taxes. Employers usually track your tips through credit card payments and daily cash reports, so that information is already being recorded.
2. Interest on Car Loans is Deductible Again
This one used to exist years ago, went away, and now it’s back—with conditions. You can deduct car loan interest on Schedule A, but only if the car was built in the United States.
That means you’ll need to check your vehicle’s origin before claiming it. And remember, this only matters if your itemized deductions are higher than your standard deduction.
3. Extra Standard Deduction for Age 65+
There’s good news if you’re 65 or older: you now get an additional $6,000 standard deduction.
For example, let’s say you’re a single filer over 65 with $36,000 of income. For 2025, the standard deduction is $15,750. With this new $6,000 deduction added, your taxable income drops even further—possibly to the point where you won’t owe anything.
That said, always run the numbers first. Don’t assume you don’t have to file a return. Make sure the deduction actually wipes out all your taxable income.
4. SALT Deduction Increased to $40,000
The State and Local Tax (SALT) deduction has jumped from $10,000 to $40,000. This includes state income tax and property tax.
Since 2018, people with high property taxes (often $15,000–$20,000 or more) couldn’t fully deduct them. Now, with the new $40,000 cap, they can. It may not cover everything, but it’s a big improvement, especially for those in high-tax states.
Just keep in mind: this deduction only applies if you itemize. If you take the standard deduction, you won’t benefit. But for people with large property taxes and state income taxes, this change can make a huge difference.
5. Overtime Income Exemption
Another major change: you can now exclude up to $12,500 of overtime pay.
This makes sense. In the past, working overtime often meant higher taxes, which discouraged people from taking extra shifts. Now, overtime workers can keep more of what they earn. Employers will track this on your pay stubs and W-2s, so you’ll clearly see the amount excluded.
Final Thoughts
Overall, I really like this bill. These changes can make a meaningful difference for a lot of people, including many of my clients.
Which of these helps you the most?