Hey, quick heads-up about that big tax bill that passed last summer—the One Big Beautiful Bill Act (yeah, OBBBA for short). Everyone’s talking about the permanent stuff, but the real money-saving opportunities right now are the *temporary* perks. And I mean *right now*—most vanish after 2028 or 2029. Here are four moves to make before year-end if you want to keep more cash in your pocket.
1. Don’t Just Grab the Standard Deduction Without Doing the Math
For years, the standard deduction was the no-brainer choice. But OBBBA temporarily jacked up the SALT cap—the deduction for state and local taxes—to **$40,000** (same for singles and married couples filing jointly). That’s up from the old $10,000 limit, and it’s only good from 2025 through 2029.
Here’s what to do:
Crunch the numbers for 2025. The standard deduction is $31,500 for married couples and $15,750 for singles. Add up your mortgage interest, charitable donations, and state/local taxes (capped at that new $40,000). If the total beats your standard deduction, *itemize*.
But watch out for the "SALT torpedo."
That sweet $40,000 cap starts shrinking if your modified adjusted gross income (MAGI) tops **$500,000** (any filing status). Hit **$600,000**, and you’re slammed back down to the original $10,000 cap. If you’re anywhere near that $500k line, think twice before cashing in big stock gains or doing a massive Roth conversion this year—that extra income could torpedo the whole benefit.
2. Grab These New Deductions (If You Can Actually Qualify)
OBBBA created a few juicy above-the-line deductions (meaning you can take them *even if* you don’t itemize). But they’re picky—strict income limits, specific rules. No free-for-all.
The Overtime Pay Break:
You can deduct some overtime pay, capped at **$25,000** for married couples and **$12,500** for singles. Here’s the catch: only the *extra half* of your time-and-a-half rate counts, not the whole overtime hour. This one fades fast—starts phasing out at **$300,000 MAGI** for couples, gone completely by **$550,000**.
The Tips Deduction:
Got tip income? You can write off up to **$25,000** per tax return (married or single). The key? The tips *must* be officially reported to your employer on your W-2 (or 1099 if you’re a contractor). No under-the-table cash. This one also phases out, starting at **$300,000** for couples and **$150,000** for singles, disappearing by **$550,000** and **$400,000** respectively.
The Car Loan Interest Perk:
You can deduct up to **$10,000** in interest on a car loan, but only if the vehicle is brand-new, for personal use, and *final-assembled in the U.S.* Leased cars? Not eligible. This is aimed at lower incomes: phase-out starts at **$200,000** for couples and **$100,000** for singles, gone by **$250,000** and **$150,000**.
3. Seniors: Don’t Blow It on a Badly Timed Roth Conversion
If you’re 65 or older, OBBBA hands you a temporary deduction of up to **$12,000** for married couples ($6,000 per spouse) or **$6,000** for singles. Sounds great, right? But it’s fragile.
Here’s the deal:
This deduction starts vanishing if your MAGI goes over **$150,000** (couples) or **$75,000** (singles).
So, about that Roth conversion...
If you’re a senior hovering near that $150k limit, a big Roth conversion could push you over the edge and *poof*—there goes your $12,000 deduction. Before you convert, run the numbers with your advisor. Sometimes waiting until 2026 is the smarter move. Losing that deduction could cost you way more than the long-term Roth benefit is worth.
4. Play the Income Game
So many of these breaks are tied to your MAGI. For a lot of people, the single best move is simply keeping your income under those phase-out thresholds.
How to do that:
If you’re close to a limit (like $300k for tips/overtime or $500k for the SALT cap), think about pushing income into next year. That could mean:
- Holding off on selling that high-flying stock.
- Delaying the exercise of stock options.
- Maxing out your 401(k) and HSA contributions to slash this year’s MAGI.
- Parking that Roth conversion idea for now.