Tax-Saving Tips: OBBBA 2025 Edition

How the One Big Beautiful Bill Act Can Help You Save More This Year

The One Big Beautiful Bill Act (OBBBA) introduces several powerful tax-saving opportunities for 2025 and beyond. Whether you’re a business owner, a retiree, or someone looking to optimize deductions, these changes could have a meaningful impact on your financial plan.

1. Convert a Personal Vehicle to Business Use — Deduct Up to 100%

If you convert a personal-use vehicle to business use in 2025, OBBBA’s reinstatement of 100% bonus depreciation allows you to deduct up to the vehicle’s fair market value (or adjusted basis) at the time of conversion.

  • Example: Vehicle worth $31,000, used 70% for business → $21,700 deduction on your 2025 return.

  • Heavy SUVs, pickups, and vans (GVWR > 6,000 lbs.) qualify for the full deduction.

  • Smaller vehicles are subject to “luxury auto” limits but may still allow up to $20,200 in first-year deductions.

2. Hire Your Children — Pay No Federal Income Tax on Their Wages

With the standard deduction rising to $15,750 in 2025, your child can earn that amount tax-free when working for your business.

  • Extra savings for sole proprietors and spouse-only partnerships: Wages to children under 18 are exempt from FICA taxes, and under 21 from FUTA.

  • Even for S or C corps, the strategy works — wages are deductible and children still pay no federal income tax.

3. New Senior Tax Deduction (Ages 65+)

If you’ll be age 65 or older by December 31, 2025, you may qualify for a bonus deduction of up to $6,000 per person ($12,000 per couple).

  • Phases out at MAGI of $75,000 (single) or $150,000 (joint).

  • Can be combined with the standard deduction and the existing age-based additional deduction.

4. Higher SALT Deduction Limits

From 2025–2029, the SALT deduction cap increases:

  • $40,000 for joint filers

  • $20,000 for separate filers

Phases out for MAGI above $500,000 (joint) or $250,000 (separate).

5. Changes to Charitable Giving Rules

Starting in 2026:

  • Non-itemizers can deduct up to $1,000 (single) or $2,000 (joint) in cash donations to charity.

  • Itemizers face a new 0.5% AGI floor before donations are deductible.

Tip: Consider accelerating planned donations into 2025 to take full advantage before the new limits take effect.

6. Updated 1099 Filing Thresholds

Beginning in 2026:

  • 1099-NEC filing threshold rises from $600 to $2,000 (indexed for inflation from 2027).

  • 1099-K rules revert to the pre-2022 threshold: More than $20,000 in payments and more than 200 transactions.

Get the Full Guide

For complete details, examples, and planning strategies, download the full OBBBA Tax-Saving Tips PDF below.