

by Scarborough Capital Management
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One Big Beautiful Bill Act: What You Need to Know –Key Tax Breaks for Working Americans
PART 1 of our 3-Part Series Breaking Down the New Tax Law Changes
The One Big Beautiful Bill Act introduces a wide range of tax changes aimed at helping Americans across different life stages—from early-career workers to families and those approaching retirement. Whether you're earning tips, raising kids, or planning your estate, the bill includes new deductions, expanded credits, and planning opportunities designed to support your financial goals. The following sections break down key provisions to help you understand what’s changing and how you can prepare.
Part 1: Key Tax Breaks for Working Americans
Tax-Free Tips, Overtime Deductions, and Car Incentives Explained
Several provisions in the One Big Beautiful Bill Act are designed with working Americans—especially younger or early-career individuals—in mind. Whether you're clocking extra hours, working in service industries, or considering a vehicle purchase, here’s how the bill could impact you.
1. No Tax on Tips (2025–2028)
- New $25,000 deduction available for tipped income - Available even if you take the standard deduction - Applies to workers under $150,000 income ($300,000 if married) - Deduction phases out above those limits
2. No Tax on Overtime (2025–2028)
- $12,500 deduction for single filers, $25,000 for joint filers - Available to workers under $150,000 income ($300,000 if married) - Phases out above those limits
3. Car Incentives: New Rules for Car Buyers
- $10,000 deduction on interest for new car loans (2025–2028) - Phases out above $100,000 income ($200,000 if married) - Vehicle must be brand new and assembled in the U.S. - EV credits end after September 30, 2025 - Home energy credits end December 31, 2025
What Should Younger Earners Do?
- Track your tip and overtime income
- Consider timing car purchases
- Watch for IRS guidance if near income limits
- Speak with a tax professional to maximize benefits
- Contact Scarborough Capital Management and get the conversation started.
Read Part 2 → In Part 2 of this series, you will learn about new tax credits that can affect you if you’re raising children or planning for education.
Securities offered through Independent Financial Group, LLC (IFG), a registered broker-dealer. Member FINRA/SIPC. Advisory services offered through Scarborough Capital Management, a federally registered investment Adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. IFG and Scarborough Capital Management are unaffiliated entities. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The information provided here is general in nature and should not be considered investment, tax, or financial advice. Investing in securities involves certain risks which can include the loss of principal invested. Investors should carefully consider all risks involved before investing. You should consult with a licensed professional for advice concerning your specific situation.