The One Big Beautiful Bill Act has extended and introduced several tax provisions that may affect individual taxpayers. Highlights include:
>Higher standard deductions, allowing many taxpayers to reduce taxable income without itemizing deductions.
>Continuation of current individual income tax rates, preventing scheduled increases under prior law.
> An increased state and local tax (SALT) deduction limit from $10,000 to $40,000, which may allow some taxpayers to itemize again.
> Temporary deductions of up to $25,000 in tip income. Phase-out is $300,000 for married joint filers and $150,000 for all others.
> Additional deductions for Individuals age 65 and over of $6,000 ($12,000 for married joint filers). This is subject to income phase-out for income (MAGI) over $75,000 for single filers and $150,000 for married joint filers.
> Temporary deductions up to $12,500 ($25,000 for joint filers) of qualified overtime compensation (subject to phase-out over $150,000 for single filers and $300,000 for married joint filers). For every $1,000 of income above these thresholds, the deduction is reduced by $100.
> Additional deduction of up to $10,000 annually for auto loan interest on new personal-use vehicle loans (subject to income phase-out over $100,000 for single filers and $150,000 for married joint filers). This applies even if you do not itemize deductions.
> If you are unable to itemize deductions, you can claim an above-the-line charity deduction of up to $1,000 for single filers and $2,000 for married couples filing jointly. This only applies to cash donations to public charities. This deduction will also apply to your MA return.
> IMPORTANT: the IRS is no longer issuing paper refund checks. Therefore, you will need to make arrangements for your refund to be direct-deposited to your bank account, if you are not already doing this.
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