Complete OBBB Deductions List for 2025: All Limits, Eligibility & Examples
Every OBBB deduction in one place. Based on IRS Schedule 1-A (IR 2026-28) with exact limits, eligibility requirements, and real-world examples. Don't leave money on the table.
The Complete OBBB Deductions List
The One Big Beautiful Bill Act created five new deductions you can claim on Schedule 1-A, plus one automatic credit increase. Here's everything you can claim for tax years 2025-2028:
💰 Total Potential Savings
Maximum annual deduction: Up to $108,000 for married couples filing jointly ($77,500 single) if you qualify for all deductions. That's potentially$25,920 in tax savings at the 24% bracket.
All OBBB Deductions Summary Table
1. Overtime Deduction (Schedule 1-A, Line 1)
Maximum Deduction
• Single filers: $12,500
• Married filing jointly: $25,000
• Married filing separately: $12,500
Key Requirements
• Only the "premium" (0.5x) portion
• Must be FLSA-required overtime
• Reported in W-2 Box 12 (Code OBBB)
What qualifies: The "half" portion of time-and-a-half overtime pay required by the Fair Labor Standards Act. If you earn $30/hour regular and $45/hour overtime, you can deduct the extra $15/hour portion.
💡 Real Example: Nurse Sarah
Sarah's a registered nurse earning $40/hour ($83,200 base salary). She worked 520 overtime hours in 2025:
- Overtime pay: 520 hours × $60/hour = $31,200
- Premium portion: 520 hours × $20/hour = $10,400
- Deduction claimed: $10,400 (under the $12,500 limit)
- Tax savings: $2,496 at 24% bracket
2. Tips Deduction (Schedule 1-A, Line 2)
Maximum Deduction
• All filing statuses: $25,000
• Phases out at higher incomes
Income Limits (MAGI)
• Single: Phases out $150,000+
• MFJ: Phases out $300,000+
• Complete phaseout at $175K/$325K
What qualifies: All tip income reported on your W-2 or Form 4137 if you "customarily and regularly receive tips" as defined by the Treasury. Must have valid Social Security number.
💡 Real Example: Server Marcus
Marcus works at a busy restaurant in NYC. His 2025 income:
- Base wages: $15,600 ($7.25/hour × 2,080 hours)
- Tip income: $42,000
- Total income: $57,600 (under income limit)
- Tips deduction claimed: $25,000
- Tax savings: $3,000 at 12% bracket
3. Car Loan Interest Deduction (Schedule 1-A, Lines 3-4)
Maximum Deduction
• All filing statuses: $10,000
• Interest on qualified vehicles only
Income Limits (MAGI)
• Single: Phases out $100,000+
• MFJ: Phases out $200,000+
Qualified vehicles: Cars, minivans, SUVs, pickup trucks, motorcycles under 14,000 pounds gross vehicle weight with final assembly in the United States. Must not be used predominantly for business.
⚠️ Critical Detail: US Assembly Required
Many taxpayers miss this: your vehicle must have final assembly in the United States. Check your vehicle information label (usually on driver's door frame) or look it up using your VIN.
💡 Real Example: Teacher Jennifer
Jennifer bought a 2024 Honda Pilot (assembled in Alabama) for $45,000 in January 2025:
- Loan amount: $40,000 at 6.5% APR
- Annual interest paid: $2,515
- Income: $65,000 (under limit)
- Car loan interest deduction: $2,515
- Tax savings: $553 at 22% bracket
4. Senior Deduction (Schedule 1-A, Line 5)
Deduction Amount
• Fixed: $6,000 per qualifying taxpayer
• $12,000 if both spouses qualify
Age Requirement
• Must be 65 or older by Dec 31, 2025
• No income limits
Simple rule: If you're 65 or older by December 31, 2025, you get an automatic $6,000 deduction in addition to the standard deduction or itemized deductions. This is the easiest OBBB deduction to claim.
💡 Real Example: Retired Couple Bob & Linda
Bob (67) and Linda (69) are retired with $85,000 in pension and Social Security income:
- Standard deduction (2025): $31,500 (MFJ, both over 65)
- OBBB senior deduction: $12,000 ($6,000 each)
- Total deductions: $43,500
- Tax savings from OBBB: $1,440 at 12% bracket
5. Enhanced SALT Deduction (Schedule 1-A, Line 6)
Increased Limit
• New limit: $40,000 (was $10,000)
• Applies to state/local/property taxes
Income Limits
• Phases out starting $400,000 MAGI
• Complex calculation required
Major change: The SALT deduction limit increased from $10,000 to $40,000, but only if your modified adjusted gross income is under $400,000. This primarily benefits high-tax states like California, New York, and New Jersey.
💡 Real Example: NYC Family
The Johnsons live in Manhattan with $350,000 household income:
- NYC property taxes: $18,000
- NY state income tax: $28,000
- Total SALT: $46,000
- Old limit: $10,000 deduction
- New limit: $40,000 deduction
- Additional tax savings: $7,200 at 24% bracket
Income Limits Summary
Each OBBB deduction has different income limits. Here's where deductions phase out based on your Modified Adjusted Gross Income (MAGI):
🚨 High Earners: Phase-Out Warning
If you earn over $150,000 (single) or $300,000 (married), your tips deduction starts phasing out. At $175,000/$325,000, it's completely eliminated. Plan accordingly.
What About the Child Tax Credit?
The OBBB also increased the Child Tax Credit from $2,000 to $3,000 per child under 17, but this isn't claimed on Schedule 1-A. It's automatic on Form 1040 and doesn't count toward the deduction totals above.
Calculate Your Total OBBB Savings
Our calculator handles all five deductions with proper income phase-outs and integrates with tax bracket calculations for accurate savings estimates.
Next Steps
- Gather your documents: W-2s, 1099s, loan statements, property tax bills
- Check vehicle eligibility: Look up your VIN to confirm US final assembly
- Calculate your deductions: Use our calculator to see total savings potential
- Download Schedule 1-A: Get the latest version from the IRS
- File early: Beat the rush and get your refund faster
Questions about specific deductions? Check our detailed guides for overtime, SALT, and car loan interest.