May 29, 2025

Unlocking the New Tax Landscape: How to Prepare for Proposed 2025–2028 Deductions

At Omni 360 Advisors, we help individuals and businesses stay ahead of changing tax legislation. And with a new bill recently passed by the House—and now headed to the Senate—there may soon be fresh opportunities to reduce your taxable income. The legislation includes new deductions for tipped workers, employees earning overtime, seniors, and even car buyers.

If passed, these deductions will apply between 2025 and 2028 and could benefit a wide range of taxpayers. But even before these rules take effect, now is the time to plan strategically so you can take full advantage when the time comes.

New Tip Deduction: A Boost for Service Workers

Starting in 2025, workers in industries where tipping is customary, such as restaurants, hair salons, and spas, may qualify for a new personal income tax deduction for reported tips. While tips will still count as taxable income, this deduction would allow eligible workers to subtract the same amount from their adjusted gross income.

Here’s what you need to know:

• You don’t need to itemize to claim the deduction.
• A valid Social Security number is required.
• High-income earners (over $160,000 for 2025) and professionals like lawyers or financial advisors won’t be eligible.

Bonus for Employers: The proposed legislation would also expand the FICA tip credit to include the beauty service industry. If you’re an employer in this space, this could directly reduce your payroll tax burden.

At Omni 360 Advisors, we help clients navigate these deductions from both employee and employer perspectives, ensuring no opportunity is left on the table.

Overtime Deduction: Rewarding Extra Hours

From 2025 through 2028, employees who earn overtime (excluding tips) may be eligible to deduct some of that income. Again, this deduction doesn’t require itemizing and is aimed at helping lower- and middle-income earners reduce their tax bill during high-earning years.

If you regularly work overtime—or employ people who do—this could have a meaningful impact. We can work with you to estimate your potential deduction and help you structure your compensation in a tax-efficient way.

Extra Deduction for Seniors: A New Kind of Retirement Relief

For taxpayers aged 65 and older, the proposal includes an additional $4,000 deduction, phased out at $75,000 (single) or $150,000 (joint). Like the others, this deduction doesn’t require itemizing and is designed to reduce the effective tax burden on seniors, especially those receiving Social Security income.

Many financial experts see this as a “backdoor” attempt to lower taxes on Social Security without touching the benefit directly. Regardless of the politics, the potential benefit is real, and it’s something we’re actively modeling in our retirement plans for clients.

Auto Loan Interest Deduction: A Break for U.S.-Assembled Vehicles

Buying a new car? If this bill becomes law, you may be able to deduct up to $10,000 in auto loan interest on qualifying vehicles. There are a few conditions:

• The vehicle must be assembled in the United States.
• The deduction doesn’t apply to business-use vehicles.
• It phases out at $100,000 (single) / $200,000 (joint).
• Like the others, you won’t need to itemize.

This could offer major savings for individuals or families looking to finance a personal vehicle in the coming years. It also adds a new tax incentive for buying American-made.

At Omni 360 Advisors, we’re helping clients plan major purchases like vehicle upgrades within a larger tax strategy—timing, financing, and deduction eligibility all matter.

What Happens Next?

The Senate has yet to vote on this proposal, and it’s possible changes will be made before anything becomes law. But given the bipartisan appeal of many of these deductions, there’s a good chance that at least some version of this package will pass.

While it’s still early, this is the right time to revisit your financial plan.

• Are you planning to buy a car in the next few years?
• Will you (or your employees) earn significant tips or overtime?
• Are you nearing retirement and expecting to rely more on fixed income?

These are all reasons to sit down with a qualified advisor and run projections. At Omni 360, we don’t just react to tax law changes—we help you get ahead of them.

Your Personalized Plan for What’s Next

As a firm offering integrated financial, tax, legal, and accounting services, Omni 360 Advisors is uniquely equipped to help you respond to upcoming legislative changes. Whether you’re an individual looking to optimize deductions or a business navigating expanded credits, we create customized strategies that evolve as new rules are finalized.

Even if the bill doesn’t pass exactly as written, its direction signals that tax policy is shifting toward greater flexibility and targeted relief for working families, retirees, and American-made products.

Get Proactive, Not Reactive

A smart tax strategy doesn’t start in April—it begins today. By taking early action, you’ll be in a better position to maximize deductions, minimize tax liabilities, and make informed choices aligned with your long-term goals.

Let’s build a plan that works for you.

Contact Omni 360 Advisors today at (609) 452-0889 to schedule a strategy session. We’ll review your current tax picture, anticipate how new deductions might affect you, and design a personalized roadmap for the years ahead.

Frequently Asked Questions (FAQs)

Q: Are these deductions law yet?
A: No, the House passed the bill, but it still requires Senate approval. If passed, most deductions would begin in 2025 and run through 2028.

Q: Can I claim these deductions if I don’t itemize?
A: Yes. All of the proposed deductions can be claimed without itemizing your taxes.

Q: Who benefits the most from these changes?
A: Workers who earn tips or overtime, seniors nearing or in retirement, and those financing personal vehicles, especially if they buy American-assembled cars.

Q: How should I prepare now?
A: Work with a trusted advisor to anticipate eligibility, optimize timing for major purchases, and incorporate potential deductions into your broader financial and tax strategy.

Omni 360 Advisors | Comprehensive Tax, Legal, Financial, and Accounting Solutions for Every Stage of Life