On July 17, 2025, the IRS released Fact Sheet FS‑2025‑03, outlining several new deductions created under the One Big Beautiful Bill Act (OBBBA). These provisions many of which apply even if a taxpayer claims the standard deduction mark a dramatic shift in federal tax benefits aimed at workers, seniors, and consumers.

If you’re a tax professional, now is the time to recalibrate year-end planning strategies.

Key Deductions Introduced in FS‑2025‑03

The IRS confirms that taxpayers may now deduct the following—effective for income earned on or after January 1, 2025:

1. Overtime Pay Deduction

2. No Tax on Tips Deduction

3. Senior Standard Boost

4. Car Loan Interest Deduction

Planning Implications for 2025 Returns

For Taxpayers

For Employers

For Tax Professionals

Looking Ahead: Expect More IRS Guidance

The IRS has stated that formal regulations covering substantiation, phaseout limits, and audit exposure will be released in stages starting with proposed rules by Q4 2025.

Tax professionals should stay alert as the IRS refines enforcement mechanics. Bizora AI will be monitoring all rule changes in real time to flag deduction eligibility and document gaps.

Need help identifying which of your clients qualify for the new OBBBA deductions? Bizora’s AI assistant can parse wage data, tip income, and client profiles to pre-qualify opportunities and reduce missed benefits.