December 30, 2025
Chances are your tax situation is going to be changing in 2026. That’s because of inflation and the big beautiful bill…do you remember that law passed by congress this year? So in this video I’m going to run down some of the big things that you should probably be paying attention to before you file your taxes…because I know so many of you like to start working on that in January.
The first thing that will impact most people is the standard deduction. The big beautiful bill increased the standard deduction for a single filer or a person who is married filing separately to $15,750. For a married couple filing jointly the standard deduction was increased to $31,500 and for a head of household the standard deduction was increased to $23,625 dollars. The big beautiful bill also increased the standard deduction for tax year 2026. It’s also worth noting that the tax brackets have changed because of inflation – let me know if you want me to do a separate video about that.
Moving on…if you bought a new vehicle for personal use in 2025 and you have a loan on that vehicle, you *may be able to deduct at least some of the interest. This is the thing president trump talks about all the time. But before you go deducting your car loan interest there are several things you need to understand about who qualifies for this tax benefit and what vehicles qualify for this tax benefit. The vehicles that qualify include a car, minivan, van, suv, pickup truck or motorcycle with a gross vehicle weight rating of less than 14,000 pounds. This vehicle must have underwent final assembly in the United States. The taxpayers who qualify to deduct the interest on the loan up to $10,000 include taxpayers with modified adjusted gross income under $100,000 for single filers and $200,000 for joint married filers. This deduction only applies if you purchased the car for personal use any time after December 31 of 2024. It does not apply if you leased the car and does not apply if you are using the vehicle for work purposes. If that’s you, this deduction is available for itemizing and non-itemizing taxpayers and it will only be available through 2028. If you want to check if your car had final assembly in the US I will also email you the official search function to you in my FactsHQ email tonight.
Yes – I’m going to talk about how Trump’s no tax on tips and no tax on overtime tax benefits will work in a second – but first – if you have kids – you should know the big beautiful bill also increased the child tax credit. Of course to qualify for the child tax credit, your child must be under the age of 17 before December 31, 2025, must be claimed as a dependent and must have lived with you for more than half of the year. This year’s child tax credit is $2,200 for qualifying child. But to be eligible for that full amount you as the parent must also have an annual income of less than $200,000 as a single filer and $400,000 if you are married filing jointly.
Ok now to the no tax on overtime tax deduction. As I have been reporting since this bill was passed – and as you know by now – your overtime in your paycheck is still taxed. The reality is – congress made “no tax on overtime” a tax deduction at the end of the year. But you can only get that tax deduction if you are qualified and only if your overtime qualifies. The IRS says you can only deduction the portion of your pay that exceeds your regular rate. So the “half” part of your “time-and-a-half.” The law says you can only deduct up to $12,500 of overtime pay if you are a single filer or $25,000 over overtime pay if you are married filing jointly. The IRS says you can only deduct that full amount if you make less than $150,000 as a single filer and less than $300,000 if you filing married joint. You must also have a social security number to qualify for this deduction. This particular tax benefit will only be available until 2028.
Let’s talk about no tax tips. This deduction is generally the same as the no tax on overtime deal. Not only do you need to be qualified but the tip has to be qualified in order to be able to deduct it. The IRS says this deduction can apply to either employees of a company or self-employed taxpayers but only if your modified adjusted gross income is under $150,000 as a single filer or $300,000 if you are married filing jointly. You must also have a social security number to qualify. You can only deduct up to $25,000 of qualified tips that you receive from customers, including shared tips. So how do you know if your tip is qualified? Well – the law says you can only deduct tips if the IRS has listed your job as a customary job that regularly receives tips. A teacher would not qualify. Right? Teachers don’t customarily receive tips so if for some reason they got a tip – it can’t be deducted. But someone in the food or beverage service industry like a restaurant worker or a bartender can deduct tips. Or a personal appearance and wellness provider like a hair dresser or a nail tech can deduct tips. Or a driver in the transportation and delivery industry would also qualify. Fun fact – the IRS says digital content creators can also qualify to deduct their tips. Lastly – the tip is only qualified –according to the IRS if it was paid voluntarily by the customer. So – if that tip was automatically added to a customer’s bill – like an automatic gratuity — the IRS says that tip is not qualified to be deducted.
Read more about the tips, OT & car loan deductions here.
See if your vehicle had final assembly in the USA here.
See if your job is eligible to deduct tips here.
More proposed rule on the exact jobs for deducting tips here.
Changes to the Child Tax Credit here.
