deductions
3 questions
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Can I deduct auto loan interest in 2026?
Yes, for the first time since the 1980s. The One Big Beautiful Bill Act created a federal deduction of up to $10,000 per year on interest paid on qualifying personal-use vehicle loans for tax years 2025 through 2028. The vehicle must be new (you must be the original user), have a gross weight rating under 14,000 pounds, undergo final assembly in the United States, and be financed by a loan originated after December 31, 2024. The deduction phases out for modified adjusted gross income above $100,000 (single) or $200,000 (married filing jointly).
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What is the no-tax-on-overtime deduction for 2026?
The One Big Beautiful Bill Act created a federal deduction of up to $12,500 per taxpayer ($25,000 for joint filers) on the qualifying overtime portion of wages — the half-time premium above your regular pay rate, not your full overtime hours. The deduction phases out for MAGI above $150,000 (single) or $300,000 (married filing jointly), applies to tax years 2025 through 2028, and only counts overtime required by the Fair Labor Standards Act.
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What is the no-tax-on-tips deduction for 2026?
The One Big Beautiful Bill Act created a new federal deduction of up to $25,000 per taxpayer on qualified tip income for tax years 2025 through 2028. The deduction is available whether you itemize or take the standard deduction, but phases out for taxpayers with modified adjusted gross income above $150,000 (single) or $300,000 (married filing jointly), and applies only to occupations the IRS designates as customarily and regularly tipped.