Temporary tax breaks under the One Big Beautiful Bill Act offer savings opportunities—but income thresholds and phaseouts mean careful planning is key.
With tax season underway and the April 15 filing deadline approaching, taxpayers are being encouraged to review new changes introduced by the One Big Beautiful Bill Act to help minimize their tax bills and avoid filing delays.
The law, signed in July 2025, made several permanent revisions to the tax code. It also created a series of temporary deductions and expanded limits—many of which expire after 2028 or 2029 and come with strict income phaseouts.
The IRS has urged taxpayers to review the new provisions carefully and use online tools at IRS.gov to help ensure smooth processing.
Here are nine strategies to consider.
1. Revisit Itemizing Under the Higher SALT Cap
The One Big Beautiful Bill Act (OBBBA) temporarily increased the state and local tax (SALT) deduction cap from $10,000 to $40,000 for both single filers and married couples filing jointly.
For 2025, the standard deduction is $15,750 for singles, $31,500 for married couples, and $23,625 for heads of household.
Taxpayers whose total itemized deductions—including mortgage interest, charitable contributions, and state and local taxes—exceed those amounts may benefit from itemizing.
However, the expanded SALT cap begins phasing out at $500,000 in modified adjusted gross income (MAGI) and returns to $10,000 once MAGI reaches $600,000.
Because many benefits phase out at specific income levels, reviewing your projected MAGI before making major financial moves—such as selling investments or doing a Roth conversion—can help protect valuable deductions.
While most of your 2025 income is already set by filing season, certain contributions made before the April deadline, such as individual retirement account or health savings account funding, can still lower taxable income and help preserve income-sensitive tax breaks.
2. Calculate the Overtime Deduction Carefully
The law introduced a temporary deduction for qualified overtime compensation, capped at $25,000 for married couples and $12,500 for singles.
Only the additional “half-time” portion of time-and-a-half pay qualifies—not the full overtime rate.
The deduction begins phasing out at $300,000 in MAGI for joint filers and disappears entirely at $550,000.
Taxpayers should confirm that their W-2 accurately reflects overtime earnings before claiming the deduction.
By Tom Ozimek
