Take Advantage of These 7 Above-the-Line Deductions in 2025 and Beyond

President Trump signed the One Big Beautiful Bill Act (OBBBA) over the summer of 2025, and it changed the game for nearly every taxpayer nationwide. Signed into law on July 4, this significant piece of tax legislation made permanent many of the tax provisions enacted in the President’s first term in the 2017 Tax Cuts and Jobs Act (TCJA). It also rolled out a variety of other changes, from Medicare funding cuts to brand new deductions.

Many of the deduction changes are good news for taxpayers, particularly those who plan on taking the standard deduction—as is the case for around 90% of us.¹ If you’re getting ready to prep your 2025 taxes or looking ahead to future years, here are several above-the-line deductions to help you keep more of your hard-earned money.

Deduction #1: Standard deduction

Okay, the standard deduction may not be an above-the-line deduction, but it still felt noteworthy enough to kick off our list.

Originally set to drop back down to pre-TCJA levels, the standard deduction will now remain at its elevated levels (even receiving an additional boost). 

When the TCJA initially passed in 2017, the standard deduction nearly doubled, going from $6,500 for single filers ($13,000 joint) to $12,000 ($24,000) in 2018.² The deduction has been adjusted each year for inflation. In 2025, the original standard deduction was set to be $15,000 for single filers and $30,000 for joint filers. 

Now, with the OBBBA, the standard deduction not only remained at the increased level but rose to $15,750 for single filers and $31,500 for joint filers.^{3, 4}

Deduction #2: Senior standard deduction

The senior deduction, introduced in the OBBBA, is a temporary additional deduction intended to help relieve some of the burden of inflation on retirees. Set to expire in 2028, the senior deduction allows taxpayers who are 65 or older and have a modified gross income (MAGI) under $75,000 (or $150,000 for couples filing jointly) to deduct an extra $6,000. This is on top of the regular standard deduction.²

Married couples who both qualify for the deduction will receive a $12,000 total additional deduction. If only one spouse is 65 or older, the deduction for joint filers stays at $6,000. The benefit begins to phase out for single filers with incomes above $175,000 and for joint filers earning more than $250,000.⁴

Deduction #3: Tips

A new offering for eligible service workers, the “No Tax on Tips” deduction enables employees and service industry professionals to deduct up to $25,000 in qualified tips, phasing out once an individual’s MAGI exceeds $150,000 ($300,000 for married couples filing jointly).⁴

The deduction applies to both voluntary and charged tips as well as tip sharing.⁵ The OBBBA specifies, however, that only individuals working in an occupation “which customarily and regularly receives tips” count as qualified tips.⁴

If tips make up a regular portion of your income, this deduction could make a noticeable difference at tax time. However, it’s currently set to expire at the end of 2028.

Deduction #4: Overtime

Another new deduction for eligible employees to consider is the overtime pay deduction. Available through 2028, this deduction allows individuals to deduct the portion of pay above their usual wage, such as the “half” in “time-and-a-half” overtime compensation. 

The maximum annual deduction is $12,500 ($25,000 for joint filers) and phases out for individuals with a MAGI exceeding $150,000 or $300,000 for married couples filing jointly.⁴

Just like the new deduction for tips, this deduction will be available through the 2028 tax year.

Deduction #5: Car loan interest

The OBBBA introduced another first-time offering in 2025—a federally available tax deduction on car loan interest. Individuals who earn up to $100,000 ($200,000 for joint filers) are eligible to deduct up to $10,000 in qualifying interest.

The deduction does not apply to vehicles used for commercial purposes or assembled outside of the U.S., and it begins to phase out for single filers earning between $100,000 and $150,000, and for joint filers earning between $200,000 and $250,000.⁴

Once again, this deduction will only be available for tax years 2025 through 2028, so if you’re considering buying a car and financing it, this is one important consideration to keep in mind. 

Deduction #6: Charitable giving (sort of)

If you or your spouse give throughout the year—but don’t itemize your deductions—you may be eligible for a charitable deduction for the first time since the Covid-era special tax laws of 2020 (as part of the CARES Act). 

With the exception of the 2020 tax year, only those who itemized deductions could deduct qualifying donations (up to the IRS’s AGI limits, which varied based on donation type). The OBBBA makes it so taxpayers can now take above-the-line charitable deductions. Starting in 2026, taxpayers can deduct up to $1,000 ($2,000 for couples).⁴

However, if you do choose to itemize and make charitable contributions, this deduction only kicks in once your donations exceed 0.5% of your AGI. For example, if your income is $100,000, that threshold would be at least $500. So, if you donated $1,000 over the year, the first $500 doesn’t count because it falls below the required minimum, but you would be able to deduct the rest.⁴ Though, if this is the case, the standard deduction may suit you better (depending on the rest of your financial picture). 

If you can’t claim the full deduction this year, you may be able to roll unclaimed donations over to upcoming tax years.

Deduction #7: Personal casualty loss

The OBBBA broadens eligibility for casualty loss deductions—expanding deductible losses from solely federally declared disasters to include state-declared disasters as well. Starting in 2026, if your state declares a hurricane, wildfire, flood, or other severe event, you may be able to deduct the damage to your home, car, or personal property.

However, limitations from the OBBBA will now be made permanent. First, individuals can only deduct losses from declared disasters. Second, each disaster event must first be reduced by $100, and after that, your total yearly losses must exceed 10% of your Adjusted Gross Income (AGI) to qualify.⁴

While the OBBBA limits casualty loss recovery in some ways, including state-declared disasters may be a big help to some taxpayers moving forward. While no one expects disaster to strike, knowing you may be able to recover some financial losses in future tax years after a disaster can provide a bit of reassurance.

Make the most of these deductions in 2025

These deductions offer many opportunities for taxpayers to save, but not all of them will be around forever. With certain deductions set to expire in 2028, such as the tip, overtime, and car loan deduction, now is the time to take advantage of these tax breaks.

Keep in mind that changes in your income or filing status could also affect your eligibility in future years. Be sure to review your situation in advance, so you won’t be caught off guard at tax time and can prepare to make the most of it.