House bill number H.R.1 of the 119th Congress includes several tax provisions that may affect you and your family. This piece of legislation is aimed at expanding economic opportunity and financial stability for low- and moderate-income families. Here are some new deductions effective for 2025 through 2028:

No Tax on Tips
Employees and self-employed individuals may deduct qualified tips. Maximum annual deduction is $25,000; for the self-employed, deduction may not exceed an individual’s net income. This deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

No Tax on Overtime
Individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay. A Maximum annual deduction is $12,500 ($25,000 for joint filers). This deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

No Tax on Car Loan Interest
This deduction is available for both itemizing and non-itemizing taxpayers. Individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.) Maximum annual deduction is $10,000. This deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).

Deduction for Seniors
Individuals who are age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current additional standard deduction for seniors under existing law. The $6,000 senior deduction is per eligible individual (i.e., $12,000 total for a married couple where both spouses qualify). Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).

For more details on these changes, visit the IRS website.