2025 Tax Deductions You Don’t Want to Miss: OBBBA Planning Strategies   

When the One Big Beautiful Bill Act (OBBBA) was signed into law, it locked in several tax provisions and introduced a handful of new benefits. While many changes are permanent, others are only available for a limited time. That includes a number of deductions and expanded limits set to disappear after 2025. 

For high earners, retirees, and business owners, this makes 2025 a unique planning window. Taking the time to understand what’s changing and when can help you make more informed decisions before the year ends. 

What the Big, Beautiful Bill Changed  

While OBBBA made many provisions from the 2017 Tax Cuts and Jobs Act permanent, including lower individual tax brackets and a higher estate tax exemption, it also introduced new short-term benefits designed to offer relief or encourage action before 2026. 

For individuals, that may mean the ability to reduce taxable income through expanded deductions. For families, it may create one-time opportunities for charitable giving or education planning. And for business owners, 2025 could be a critical year to maximize deductions on capital investments and expenses. 

The key? Understanding which provisions are temporary and acting before they disappear. 

Temporary Deductions That Expire After 2025 

Several tax benefits introduced by the OBBBA are only available in 2025. These temporary deductions and credits may be especially relevant for high earners, retirees, and small business owners who want to take advantage before they expire or begin to phase out.  

• Expanded SALT Deduction Cap (Up to $40,000)  
  For 2025 through 2029, taxpayers with income under $500,000 may deduct up to $40,000 in state and local taxes (adjusted annually by 1%). Starting in 2030, the cap reverts to $10,000.  
  Who benefits: High earners in high-tax states who itemize but earn below the $500,000 threshold.  

• Temporary Deductions for Overtime, Tips, and Auto Loan Interest  
  These new deductions are among the law’s more controversial additions and are only in effect for four years.  
  Who benefits: Primarily W-2 earners and service industry workers. However, eligibility is complex.  

• Expanded Section 179 Expensing for Equipment  
  The OBBBA permanently extends less restrictive rules for expensing short-lived assets and research and development. However, some temporary enhancements (such as qualified structures) expire after 2025.  
  Who benefits: Small business owners making capital investments.  

• Additional Standard Deduction for Seniors (Temporary)  
  Seniors may be eligible for an extra standard deduction for 2025 through 2028, depending on income and age.  
  Who benefits: Retirees with moderate to high income who qualify under the age/income thresholds.  

• New Deduction for Auto Loan Interest  
  A new provision allows taxpayers to deduct a portion of their auto loan interest payments, but only through 2028.  
  Who benefits: Consumers with outstanding auto loans, though eligibility is subject to several limitations.  

These deductions may offer short-term tax relief, but many come with strict eligibility rules and are not guaranteed beyond their expiration dates. Early planning and professional guidance can help determine which strategies apply to your situation.  

What Happens in 2026?  

Many of the temporary provisions in the OBBBA are designed to bridge the gap between now and 2026. After that, several changes kick in, some of which may reduce the tax advantages available today.  

• Key provisions revert to pre-TCJA levels:  
  While the OBBBA made many of the 2017 tax cuts permanent, some limits on deductions and credits will shift. For example, the expanded SALT deduction cap begins phasing out for high-income households after 2025 and returns to $10,000 in 2030.  

• Standard deduction structure adjusts:  
  The standard deduction remains higher than pre-TCJA levels but is adjusted with new caps for top earners. This may reduce the benefit for those in higher tax brackets.  

• Estate and gift tax rules tighten slightly:  
  The lifetime estate and gift tax exemption will be locked in at $15 million per person (indexed for inflation), replacing the previously scheduled drop under the TCJA sunset. However, certain deduction opportunities may narrow, and wealth transfer strategies could become more complex.  

For individuals and business owners considering tax planning moves, 2025 offers a relatively stable and potentially advantageous environment. By 2026, some of those options could become more limited or require additional planning to navigate effectively.  

Planning Strategies to Maximize 2025 Deductions  

With a number of valuable deductions set to expire, 2025 is a good year to revisit tax plan and think proactively. Here are some potential strategies: 

• Coordinate timing of income and deductions  
  If you expect a higher tax bracket in future years, it may be worth accelerating income or deductions into 2025. Timing matters when you’re navigating phaseouts and thresholds.  

• Accelerate eligible business or personal expenses  
  If you’re a business owner, it could make sense to invest in equipment or take advantage of enhanced expensing rules this year. Individuals may want to bunch medical, education, or other deductible costs into 2025.  

• Collaborate with a financial or tax professional  
  These strategies work best when they’re tailored to your situation. A professional can help you model the potential impact and adjust course as needed.  
   

Don’t Let These Opportunities Pass You By  

Temporary tax provisions don’t come around often. The deductions available in 2025 could offer meaningful advantages, but they won’t last.  

By taking time now to review your income, expenses, and long-term goals, you may uncover planning opportunities that won’t be available in future years. For high earners and retirees in particular, this window deserves a closer look.  

Want to see which deductions apply to your situation? Download our full guide to Roth Conversions & the Big, Beautiful Bill: Your 2025 Guide to Strategic Tax Planning, or schedule a complimentary review with our team to talk through your options.  

Standard Disclosure  

This blog expresses the author’s views as of the date indicated, are subject to change without notice, and may not be updated.  The information contained within is believed to be from reliable sources.  However, its accurateness, completeness, and the opinions based thereon by the author are not guaranteed – no responsibility is assumed for omissions or errors.  This blog aims to expose you to ideas and financial vehicles that may help you work towards your financial goals. No promises or guarantees are made that you will accomplish such goals.  .  

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References  

Bunn. Daniel. (July 9, 2025). The Good, the Bad, and the Ugly in the One Big Beautiful Bill Act. Tax Foundation. https://taxfoundation.org/blog/one-big-beautiful-bill-pros-cons/