Tax Planning
Year-End Strategy: Maximizing Senior and Auto-Loan Deductions Under the One, Big, Beautiful Bill
New deductions for seniors and interest on personal auto loans are now available under the One, Big, Beautiful Bill—taxpayers should plan now to take advantage before the 2025 filing deadline.
By NomadicTax Research Team • 5-8 min read • November 21, 2025
## New Deductions to Know for 2025–2026
The One, Big, Beautiful Bill (effective for tax year 2025 through 2028 for many provisions) expands individual deductions in meaningful ways:
- **Senior Deduction (Sec. 70103)**: Individuals age 65 or older may claim an additional $6,000 deduction. For married couples where both qualify, that’s $12,000 total. Phases out above $75,000 AGI for single filers, $150,000 for joint.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Auto-Loan Interest Deduction**: Interest paid on a loan used to purchase a **new, qualifying vehicle**, for personal—not business—use. Up to $10,000 annually. Phase-out applies above $100,000 AGI (single), $200,000 joint. Vehicles must be first owned by buyer, not used. Lease payments don’t qualify.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Actionable Steps Before Year End
1. **Evaluate your AGI trajectory**—if projected to be near phase-out levels, look for legal ways to reduce taxable income (e.g., maximizing retirement contributions, health savings account, etc.).
2. **Time your vehicle purchase**: If considering a vehicle, ensure it’s a *new, qualifying personal use vehicle* and loan begins **after December 31, 2024**, to qualify. Used vehicle purchases or leases don’t help.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
3. **Senior taxpayers should verify eligibility**: Make sure youre turning 65 by December 31, 2025. Collect Social Security numbers as required, and if married, file jointly if both qualify to maximize the benefit.
4. **Work with lenders or payors** to ensure proper recordkeeping and required information returns and statements. If you’re paying auto-loan interest, ensure lender’s statements. For “no tax on tips” or other provisions, gather reports of tips, occupations, etc.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Comparison Table: Old vs. New Deductions
| Deduction Type | Was in Effect Before OBBB? | Under OBBB for 2025–2028 | Phase-Out Starts At |
|---|---|---|---|
| Senior Deduction Additional Amount | None | $6,000 (single), $12,000 (joint where both spouses 65+) | $75,000 single / $150,000 joint AGI |
| Auto-Loan Interest (for qualifying vehicle) | Not allowed for personal use under old law | Up to $10,000 interest deduction permitted for loans meeting eligibility requirements | $100,000 single / $200,000 joint AGI |
## Example Scenario
Jorge, age 67, expects adjusted gross income of $80,000 in 2025. He bought a new personal vehicle in March 2025, financed with a loan originating after Dec 31, 2024. He paid $8,000 interest in 2025. Under OBBB, Jorge can deduct the full $8,000 (since it’s under $10,000 cap), *plus* take the $6,000 senior deduction. Because his AGI is above $75,000, the senior deduction will be partially phased out. Examine worksheets or consult tax software to calculate correctly.
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These deductions offer significant savings—but only if the transaction, timing, and eligibility rules are met. Work with your tax preparer now to ensure you maximize them before filing your 2025 returns.