New Tax Law Deductions Calculator (2026)
The 2025 tax law created four new deductions that you can claim even with the standard deduction: tips, overtime, car loan interest and a bonus for people 65+. Most calculators only check one. Enter what applies to you and see your total savings in one place.
The four new deductions
| Deduction | Maximum | Phase-out starts |
|---|---|---|
| No tax on tips | $25,000 | $150,000 / $300,000 |
| No tax on overtime | $12,500 / $25,000 married | $150,000 / $300,000 |
| Car loan interest | $10,000 | $100,000 / $200,000 |
| Senior bonus (65+) | $6,000 per person | $75,000 / $150,000 |
All four apply to tax years 2025 through 2028, can be taken with the standard deduction, and lower federal income tax only.
Examples
Common mistakes
- Counting all overtime pay. Only the extra half of time-and-a-half counts. This calculator takes one third of your overtime pay at 1.5x.
- Thinking tips are tax-free. Tips are still subject to Social Security, Medicare and most state taxes.
- Any car loan. Only new cars with final assembly in the US, bought with a loan after 2024, qualify.
- No tax on Social Security. The senior deduction is a deduction, not an exemption for benefits.
- Married filing separately. You generally cannot claim these deductions if you file separately.
How this calculator works
Each deduction is capped and phased out using its own 2026 rules and your income. They are added together and subtracted from your income, and your 2026 federal income tax is figured with and without them, using the standard deduction plus the extra standard deduction for people 65+. For details on each one, use the linked single calculators.
FAQ
Can I claim more than one of these deductions?
Yes. You can claim every one you qualify for, for example tips and car loan interest together.
Do I need to itemize?
No. All four new deductions can be taken with the standard deduction.
Do these lower Social Security and Medicare tax?
No. They only reduce federal income tax.
How long do they last?
They apply to tax years 2025 through 2028 unless Congress extends them.
Will my paycheck change?
Mostly not automatically. The savings usually show up when you file, unless you update your W-4.
Rules and rates last checked: October 2026. This is an estimate for general information only, not financial, tax or legal advice. Check IRS.gov or a tax professional before you file.