The ‘One Big Beautiful Bill’ Offers Americans Lots Of New Tax Benefits. Here’s A Few To Plan For
Tax season may still be months away, but now is the time to prepare for major changes brought by the “One Big Beautiful Bill” (OBBB), a sweeping tax and spending law passed in July.
While tax-free tips, overtime pay, and a $6,000 senior deduction have grabbed headlines, experts say there are many more new benefits worth planning for.
Charitable Deductions Now Available to More Taxpayers
Starting in 2026, taxpayers who take the standard deduction can deduct charitable contributions — a significant shift. Previously, only itemizers qualified, with temporary relief during COVID allowing small deductions. Under OBBB, individuals can deduct up to $1,000, or $2,000 for married couples, as above-the-line deductions, reducing their adjusted gross income and potentially unlocking additional tax savings.
Auto Loan Interest Now Deductible for Some
For the first time since 1986, personal auto loan interest will be deductible — even if you don’t itemize. Beginning in 2025 through 2028, taxpayers can deduct up to $10,000 in interest on new, U.S.-assembled vehicles for personal use, subject to income limits. While eligibility rules may complicate things, this could influence the decision to buy or lease a car, experts say.
More Relief for Families
OBBB introduces two key changes for families:
- Dependent Care Flexible Spending Accounts (DCFSA): The annual contribution limit increases permanently to $7,500 (or $3,750 for separate filers), up from $5,000. Enrollment for 2025 plans begins soon.
- Child and Dependent Care Credit (CDCC): Starting in 2026, the credit rate rises from 35% to 50% of eligible expenses (up to $3,000 for one child and $6,000 for two or more). The phase-out threshold also increases significantly — to $206,000 for joint filers (from $86,000) and $103,000 for individuals (from $43,000). Nearly 4 million families are expected to benefit.
According to Sarah Rittling, executive director of the First Five Years Fund, “A family with two young children earning under $150,000 could see their credit increase by $900 — a meaningful boost for those balancing tight budgets.”
Plan Ahead
Taxpayers should monitor their income levels, especially as many of the new credits and deductions are phased out gradually.
“These changes open up tax planning opportunities that didn’t exist under the 2017 Tax Cuts and Jobs Act,” said CPA Brian Gray of Gursey Schneider.
Strategic moves — like contributing more to retirement accounts — could help lower taxable income and increase access to these expanded credits.
“There are a lot of income-based cutoffs,” added CPA Brian Schultz of Plante Moran. “Be mindful and plan early.”
Source: USA Today
