Your OBBB Tax Savings Calculator
The One Big Beautiful Bill (OBBB) Act created six new federal tax deductions for 2026: overtime premium pay, tips, car loan interest, a senior bonus deduction, an increased child tax credit, and a higher SALT cap. Use our free calculator to find out how much you'll save.
✅ Based on IRS Schedule 1-A (released March 2, 2026)
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The One Big Beautiful Bill Act creates new deductions that could save you thousands. Explore each one to see how much you could save.
Overtime Premium Pay
Deduct overtime premium wages up to $12,500 (single) or $25,000 (married filing jointly)
Tips Deduction
Deduct reported tip income up to $25,000 with no federal tax
Car Loan Interest
Deduct interest on loans for US-manufactured vehicles up to $10,000
Senior Deduction
Additional $6,000 per person standard deduction for taxpayers 65 and older
Child Tax Credit
Increased from $2,000 to $2,200 per qualifying child
SALT Cap Increase
State and local tax deduction cap raised from $10,000 to $40,000
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What Is the One Big Beautiful Bill Act?
The One Big Beautiful Bill (OBBB) Act is federal tax reform legislation signed into law in 2025, effective for tax year 2026. It creates six new tax deductions designed for working Americans: overtime premium pay, tip income, car loan interest on U.S.-manufactured vehicles, a senior bonus standard deduction, an increased child tax credit, and a higher SALT cap. Deductions are claimed on Schedule 1-A (Form 1040), released by the IRS on March 2, 2026.
All 6 OBBB Deductions at a Glance
| Deduction | Maximum Amount | Who Qualifies | Requires Itemizing? |
|---|---|---|---|
| Overtime Premium Pay | $12,500 (single) / $25,000 (MFJ) | W-2 employees with FLSA overtime | No |
| Tips Income | $25,000 | W-2 tipped employees | No |
| Car Loan Interest | $10,000 | Loans on US-manufactured vehicles | No |
| Senior Bonus Deduction | $6,000 per person | Taxpayers age 65+ | No (standard deduction) |
| Child Tax Credit | $2,200 per child | Qualifying children under 17 | No (credit on 1040) |
| SALT Cap Increase | $40,000 (up from $10,000) | Itemizers in high-tax states | Yes (Schedule A) |
Frequently Asked Questions
What is the One Big Beautiful Bill (OBBB) Act?
The One Big Beautiful Bill (OBBB) Act is comprehensive federal tax reform legislation signed into law in 2025, effective for tax year 2026. It creates six new tax deductions for working Americans: overtime premium pay (up to $12,500), tips income (up to $25,000), car loan interest for US-made vehicles (up to $10,000), an additional senior standard deduction ($6,000 per person age 65+), an increased child tax credit ($2,200 per child), and a higher SALT deduction cap ($40,000, up from $10,000).
How much can I save with the OBBB tax deductions in 2026?
Total savings depend on which deductions you qualify for and your tax bracket. A worker in the 22% bracket who claims the maximum overtime deduction ($12,500) saves $2,750. A tipped worker claiming the full $25,000 tips deduction saves $5,500. Combined with car loan interest, senior, child tax credit, and SALT deductions, some households could save over $10,000 in federal taxes.
What is Schedule 1-A and how do I use it?
Schedule 1-A is a new IRS form released on March 2, 2026, specifically for claiming OBBB deductions. It is attached to Form 1040 and reports above-the-line deductions for overtime premium pay and tip income. The totals from Schedule 1-A flow to Schedule 1, Line 8l, then to Form 1040, Line 8. You do not need to itemize to use Schedule 1-A.
Do I need to itemize to claim OBBB deductions?
No. The OBBB overtime and tips deductions are above-the-line deductions, meaning they reduce your adjusted gross income (AGI) regardless of whether you itemize or take the standard deduction. The SALT deduction still requires itemizing on Schedule A. The child tax credit and senior deduction are applied separately on Form 1040.
When do the OBBB tax deductions take effect?
The OBBB tax deductions take effect for tax year 2026. You will claim them when filing your 2026 federal tax return (filed in early 2027). The IRS released Schedule 1-A on March 2, 2026, and employers began reporting OBBBTT codes on W-2 forms for the 2026 tax year.
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