Find out how new tax breaks will impact your tax return

SALT LAKE CITY — We’re in the home stretch of tax season as the April 15 filing deadline rapidly approaches. New tax breaks passed by Congress last summer in the so-called “Big Beautiful Bill” can bring tax relief for Utahns 65 and over, those who work in the service industry, car buyers and many more. But there are important limitations you should know about. “It's going to impact Utahns in a good way,” said Susan Speirs, CEO of the Utah Association of CPAs. “Hopefully, we're going to be seeing bigger refunds.”

Bonus deduction for seniors

First, seniors have a new deduction. “If you’re 65 by December 31, 2025, you get to take an extra $6,000 deduction,” Speirs said. For couples who’re both 65 and filing jointly, that goes up to $12,000.“This could put you in a situation, especially if you're married filing jointly and let's say you don't have a lot of income, you could be in a situation where you owe no income tax,” she elaborated.

Limit raised on state and local tax deduction

For homeowners that have a big home with big property taxes, you can you write off more of what you pay to the state and county. “That's been capped at $10,000 for several years now. It's been opened up to $40,000” Speirs said. “That opens up some deduction space, which means tax savings.”

Taxes on some tips eliminated

If you earn tips as a server, a hairstylist, a rideshare driver or in some sort of service, your tips are no longer taxed. But there are limits. “If it’s a tip or gratuity that's required as part of the service, that isn't deductible.” Speirs explained. Tips that qualify for the new deduction are those that are voluntarily and the amount was determined by the person who gave you the tip. You can deduct up to $25,000 on qualified tips.

Overtime tax relief

If you worked overtime in 2025, over 40 hours a week, you could qualify for some tax relief. Speirs said you will still have to report your entire wage on your return, but you’ll get a tax break for the extra half in time-and-half pay. “Let’s say you're getting paid $50 an hour, and you work a lot of overtime, you're going to be making $75 an hour,” she said. “So, that $25 — the half pay — that's deductible. That will come off your tax bill.”

New car? New tax break

And if you bought a new car or motorcycle in 2025, car loan interest is now deductible. Maybe. “You can deduct up to $10,000 in interest on your car loan,” Speirs said. “However...final assembly has to be in the United States." The car must weigh less than 14,000 lbs. to qualify. But the final assembly doesn’t mean the car needs to be a GM, Ford or some other American brand of vehicle. It can be a Mazda or a Honda, just so long has the final assembly took place in the country. If you’re not sure about your car, you can use NHTSA's VIN decoder to find out exactly where it was assembled. If you need help with the new tax breaks or taxes in general, the Utah Association of CPAs is offering free guidance throughout the year on Facebook, Instagram and TikTok.

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