More Money, Less Tax: What the One Big Beautiful Bill Means for Your Paycheck

Jul 17

3 min read

Published by Turner Business Solutions

Helping individuals and small businesses navigate change with clarity and confidence.

The One Big Beautiful Bill Act has officially landed — and for individual taxpayers, that means some big changes aimed at putting more money in your pocket. Whether you're earning tips, clocking in overtime, or simply filing your annual return, the new tax law offers fresh opportunities for savings.

This post breaks down the biggest tax updates affecting individual income and deductions — especially those that may directly impact your paycheck in 2025 and beyond.

Let’s take a closer look:

💵 Tips: First $25,000 Now Tax-Free

For service industry workers, this is one of the most impactful changes in decades: the first $25,000 in tip income is now exempt from federal income tax.

Who qualifies:

Full deduction available to taxpayers with AGI under $150,000 (single) or $300,000 (married filing jointly).
Deduction phases out above those income thresholds.

Things to know:

Tips still need to be reported, but anything under the $25K cap could be completely tax-free if you meet the income guidelines.
State taxation may still apply.

⏰ Overtime Pay: $12,500 Exemption

Clocking extra hours? The first $12,500 of your overtime pay is now excluded from federal income tax.

Eligibility:

AGI must be under $150,000 (single) or $300,000 (joint) to qualify for the full deduction.
Partial deduction available within a small phaseout range.

Important note:

This applies to overtime wages only, not bonuses or other supplemental income. And like tips, these earnings are still subject to Social Security and Medicare taxes.

💰 Standard Deduction Gets a Modest Boost

To reduce taxable income for most Americans, the standard deduction is increasing across the board:

Single filers: from $14,600 → $15,750
Married filing jointly: from $29,200 → $31,500
Head of household: from $21,900 → $23,625

Why it matters:

If you don’t itemize (most people don’t), this higher deduction means less taxable income and potentially a smaller tax bill.

👵 Senior Bonus Deduction: $6,000 Per Person

Seniors age 65 and older get a major new benefit: a $6,000 bonus standard deduction per qualifying taxpayer.

That’s up to $12,000 extra for a married couple filing jointly, in addition to the standard deduction above.

Phaseouts apply:

Fully available for AGI under $75,000 (single) or $150,000 (joint)
Begins phasing out above those levels

Extra benefit:

This bonus also increases the thresholds for taxing Social Security income, allowing more retirees to receive their benefits completely tax-free.

🧾 SALT Deduction Cap Raised — Now $40,000

The cap on deducting State and Local Taxes (SALT) has increased significantly: from $10,000 to $40,000.

Why it matters:

This offers meaningful relief to taxpayers in high-tax states, especially property owners and professionals with large state income tax bills.

⚠️ Note: The new cap is generous, but not everyone qualifies — certain income-based phaseouts and restrictions apply, so consult your advisor.

🚗 Car Loan Interest Is (Partially) Back

For the first time in years, personal car loan interest is again tax-deductible — up to $10,000 per year.

But there’s a catch:

The deduction phases out between $100,000–$150,000 AGI for single filers
And between $200,000–$250,000 AGI for married joint filers

Who benefits:

Everyday taxpayers with car loans now have a new above-the-line deduction — no itemizing required.

👉 Stay tuned for Part 2, where we’ll dive into family-focused updates — including child tax credit boosts, charitable deductions for non-itemizers, and new rules around estate and gift taxes.

📞 Need help planning around these changes? (316) 285-0125

At Turner Business Solutions, we help individuals and families navigate the tax code with confidence. Whether you’re trying to maximize deductions or understand how these new laws impact your retirement income, we’re here to help.