There’s been no shortage of opinion flying around about the new One Big Beautiful Bill Act (OBBBA). And understandably so. An 800+ page tax overhaul tends to stir the pot.
What I want to assure you is this: I'm here to break down what actually matters for you. And not in vague headlines or political spin, but in real-world terms that affect your wallet. So, here’s a quick rundown:
Bigger Tax Breaks for Everyone
- Standard Deduction: Rises to 15.75K (single) and 31.5K (married) in 2026, with inflation adjustments after that.
- Child Tax Credit: Increased to 2.2K per child, with inflation adjustments going forward.
- SALT Cap Boost: Temporarily raised to 40K through 2029 (phasing back to 10K after that).
More Deductions for Workers & Seniors
- Tip & Overtime Income: Workers earning under 150K can deduct up to 25K in tip income and 12.5K in overtime income (2025–2028) — still subject to SS and Medicare taxes.
- Senior Bonus Deduction: Taxpayers 65+ can claim an extra 6K standard deduction (on top of the regular one) through 2028.
Other Notable Changes
- Medicaid & SNAP: New work and eligibility requirements may affect benefits for adults ages 19–64 receiving government assistance.
- “Trump Accounts” for Newborns: Babies born 2025–2028 receive a 1K government-funded account, which grows tax-free and can convert to an IRA later.
- Auto Loan Interest: More on that below.
Depending on your filing situation (W-2 job, gig worker, retiree, digital currency dabbler), there are even more layers to unpack. I’ll keep doing that in the coming weeks, little by little.
And honestly, sometimes the best way to know what actually applies to you is to sit down and have a real conversation — one where an experienced Staten Island professional you trust breaks it down in plain English and helps you spot where the real savings are.
If that sounds like something you need, let’s set up a time to talk: link.clientstack.app/widget/service-menus/bookanappointmentnow
But for today, I want to zoom in on one change that could actually save you thousands if you’re financing a vehicle.
“Nothing ages your car as much as the sight of your neighbor’s new one.” —Evan Esar
Big news if you’re thinking about buying a new car soon: a new tax break is on the table that could mean huge savings… but only if you qualify.
As your dedicated Richmond county tax pro, I'm always watching for changes that impact your financial decisions. And the newly signed “One Big, Beautiful Bill” (OBBBA) brings a powerful (temporary) change to the tax code.
Specifically, it opens up a new car loan interest deduction that could reshape how you buy a car from now until 2028. So, let’s break down the key changes happening (and how they can work to your advantage).
For the first time in decades, consumer auto loan interest is tax-deductible up to 10K per year, per taxpayer, in interest paid on qualifying auto loans. A few key things to note:
If you strategize right, this could mean 40K in interest deductions over four years if you have a large enough auto loan. But that’s a big "if," and it’s not automatic.
1. Buy U.S.-Assembled
If your car isn’t assembled in the U.S., the deduction is off the table. And the country of origin on the sticker doesn’t always match where it was built. So, be sure to ask your dealer for documentation on final assembly.
Or do your own homework with the NHTSA VIN Decoder (and use this list of U.S.-assembled cars to give you a boost with your research).
2. Know Your Income Threshold
If your Modified Adjusted Gross Income (MAGI) exceeds 100K (or 200K for married filing jointly), you’ll be phased out of the deduction. If you're close to the cap, there may be strategies to defer income or maximize retirement contributions to stay under the threshold (and I can help you figure out the best strategy for your situation).
3. Finance (Even Partially)
This deduction applies to interest on car loans. So if you were planning to pay cash, you might want to reconsider.
Let’s say you finance a 40K vehicle, and the interest portion of your loan payments total 9.8K/year. If you’re under the income cap and the vehicle qualifies, you’d deduct the full 9.8K. That’s potentially worth 2-3K in tax savings (depending on your tax bracket).
Yes, electric vehicles can qualify for the interest deduction — but here’s the twist: the old federal EV tax credits are ending.
Here’s what changed under OBBBA:
So if you were hoping for the double dip (EV credit + interest deduction), that window closed earlier this year. From now on, it’s either/or, depending on your timing.
1. Finance Strategically
Even without the EV credit, the interest deduction can still be valuable, especially if you’re financing a more expensive electric vehicle. If the math works, it can outpace the lost credit.
2. Double-Check Assembly Location
Many EVs from Toyota, Honda, Hyundai, and Kia are assembled overseas, and ineligible. Even a U.S.-brand badge doesn’t guarantee compliance. Don’t assume your “American” EV is U.S.-assembled — check that VIN.
“Can I claim the deduction if I buy the car in 2025 but finance it in 2026?”
Nope. The deduction applies to interest paid on loans originated after Jan. 1, 2025. If your loan doesn't start in 2025 or later, it doesn't qualify — regardless of the purchase date.
“What if I refinance a car loan from a pre-2025 purchase?”
Refinancing an existing auto loan does not trigger eligibility. The deduction only applies to new loans for newly purchased, U.S.-assembled vehicles.
“Do I have to file a special form to claim this deduction?”
As of now, the IRS hasn’t released the specific reporting mechanism, but it will likely be a new line on Schedule 1 (Form 1040) or a dedicated attachment. Good news: itemizing not required.
“Can I deduct the interest on a lease?”
No. Leasing doesn’t count. Only traditional financing (installment loans) qualify for the deduction.
“Is the 10K limit per person or per return?”
The deduction is per taxpayer. So married couples filing jointly can claim up to 20K/year — if both are borrowers on separate qualifying auto loans. If only one spouse is the borrower? You’re capped at 10K.
“Does my car need to be 100 percent for personal use?”
No, but only the personal-use portion of the interest is deductible. If the car is used for business, you’ll need to allocate based on mileage and track that usage carefully.
“How do I know if my vehicle is U.S.-assembled?”
The tricky part is, the brand or country of origin listed on a car’s sticker doesn’t always reflect where it was actually built. To be sure your vehicle qualifies, you’ll want to confirm final assembly location with the NHTSA VIN Decoder. (And, here’s a helpful list of top U.S.-assembled cars.)
Tax-smart car buying starts with planning, not just guessing. There’s real money on the table here... but only for those who qualify AND strategize. So, let’s talk before you sign anything. I can help you run the numbers, analyze financing options, and make sure you’re not leaving money on the table:
link.clientstack.app/widget/service-menus/bookanappointmentnow
