New for seniors, families and car buyers: the OBBBA deductions you might be missing
Beyond the headlines about tips and overtime, the One Big Beautiful Bill Act quietly added a cluster of breaks for everyday taxpayers — a bigger senior deduction, a larger Child Tax Credit, a new car-loan interest write-off and savings accounts for newborns. Several are easy to overlook. Here's what they are and whether you qualify.
The tips and overtime deductions got the attention, but they're only part of the story. The One Big Beautiful Bill Act (Public Law 119-21) tucked in several breaks aimed squarely at ordinary households. Some are generous, some are narrower than they first appear, and a few are so new the IRS is still finalizing the rules. This guide walks through the four biggest — then a handful of smaller ones worth knowing.
Which apply to you? Find out
Answer a few questions and the finder estimates each break you're eligible for, applying the income phase-outs. Deductions and credits work differently, so it labels each one.
Now the detail behind each one — including the conditions the finder assumes you meet.
The new $6,000 senior deduction
If you're 65 or older, you can claim an extra $6,000 deduction for tax years 2025 through 2028 — $12,000 for a couple where both spouses qualify. It sits on top of the regular standard deduction and the existing age-65 additional standard deduction, and you can take it whether you itemize or not.
Stacked together, a taxpayer 65+ can shelter a substantial amount: the IRS figures work out to roughly $23,750 for a single senior and about $46,700 for a couple where both are 65+.
How the phase-out works
The deduction shrinks by 6% of the amount your MAGI exceeds $75,000 ($150,000 for joint filers). Because it's 6% of the excess, it disappears completely at:
| Situation | Full deduction up to | Gone at MAGI of |
|---|---|---|
| Single senior ($6,000) | $75,000 | $175,000 |
| Couple, one spouse 65+ ($6,000) | $150,000 | $250,000 |
| Couple, both 65+ ($12,000) | $150,000 | $350,000 |
You'll need a valid Social Security number, and married taxpayers must file jointly to claim it. It's reported on the new Schedule 1-A.
A bigger, permanent Child Tax Credit
The Child Tax Credit rose to $2,200 per qualifying child under age 17, and — unlike most of these breaks — it's permanent and indexed for inflation. Up to $1,700 per child is refundable, meaning it can generate a refund even if it exceeds the tax you owe.
- Phase-out: the credit drops by $50 for every $1,000 of MAGI over $200,000 ($400,000 for joint filers). Note these thresholds are not indexed for inflation.
- SSN rule tightened: the child needs a valid SSN, and now so does the claiming taxpayer (at least one spouse on a joint return).
- $500 for other dependents: the separate, non-refundable Credit for Other Dependents (for example, an elderly parent or a college-age child) is now permanent too.
"Trump Accounts" for newborns
The law created new tax-deferred investment accounts for children under 18. For every US-citizen child born between 2025 and 2028 (with at least one parent holding a valid SSN), the federal government makes a one-time $1,000 seed contribution. Families can add up to $5,000 a year (indexed after 2027), and employers can contribute up to $2,500 (counted within that cap). The accounts grow tax-deferred and convert to a traditional IRA at 18. The IRS is still issuing detailed guidance.
Three more family breaks worth a look
Charitable deduction without itemizing (2026). Starting in 2026, taxpayers who take the standard deduction can deduct up to $1,000 ($2,000 joint) of cash donations — a benefit that had lapsed after 2021.
Refundable adoption credit. Up to $5,000 of the adoption credit is now refundable (within the larger overall credit), helping families who previously couldn't use the full non-refundable amount.
529 plans for K–12. The annual amount families can withdraw from a 529 plan for K–12 tuition and expenses doubled to $20,000, adding flexibility for private-school costs.
A deduction for new-car loan interest — with strings attached
For 2025 through 2028, you may deduct up to $10,000 a year of interest on a loan to buy a qualifying vehicle, and you can take it whether or not you itemize. It sounds broad, but the eligibility rules are narrow — and many buyers won't qualify.
Every one of these must be true
- New vehicle only. Original use must begin with you — used vehicles don't qualify, even if new to you.
- Final assembly in the US. Check the window sticker or run the VIN through the NHTSA decoder.
- Personal use. A car, minivan, van, SUV, pickup or motorcycle with a gross vehicle weight rating under 14,000 lbs; business/fleet use generally doesn't count.
- Qualifying loan. Originated after December 31, 2024, secured by the vehicle. Leases do not qualify. Interest on a later refinance of a qualifying loan is generally still deductible.
- Report the VIN on your return every year you claim it. Lenders will report the interest to you and the IRS.
Income phase-out
The deduction falls by $200 for every $1,000 of MAGI over $100,000 ($200,000 for joint filers), so it's fully gone at $150,000 single / $250,000 joint. Combined with the vehicle and loan conditions, this is why the IRS itself notes that many taxpayers may see limited or no benefit — so confirm you qualify before counting on it.
Permanent vs temporary — at a glance
| Break | Status | Income phase-out begins |
|---|---|---|
| Child Tax Credit ($2,200) | Permanent | $200k / $400k |
| Senior deduction ($6,000) | 2025–2028 | $75k / $150k |
| Car loan interest ($10,000) | 2025–2028 | $100k / $200k |
| Trump Account seed ($1,000) | Births 2025–2028 | No income limit on seed |
What to do now
- Don't miss Schedule 1-A. The senior and car-loan deductions are claimed on this new form — make sure your preparer uses it.
- Check your car's eligibility before you count on it. New, US-assembled, financed after 2024, personal use — verify the VIN and keep the lender's interest statement.
- Confirm SSNs for the Child Tax Credit. Both the child and at least one filer now need one.
- Mind the phase-outs. If you're near a threshold, reducing MAGI (retirement contributions, timing) can rescue a break.
- New baby? Look into the Trump Account once IRS guidance is out, to capture the $1,000 seed.
- Amend 2025 if you missed something — most of these applied retroactively to the 2025 tax year.