How to Take Advantage of the Big Beautiful Bill

My wife Tracy has worked in tax prep for decades, and tax season has arrived. As tax season arrives in my practice as well, we continue to learn more about the tax provisions of the One Big Beautiful Bill (OBBA) passed during 2025, and the planning opportunities it affords.

In this highly charged political environment, so many seem to only view government policy through political eyes and propaganda — but allow me to cut through the partisan noise. The OBBA is not a "tax cut for the rich." What it actually does is set up the most attractive tax environment for lower-income and middle-income American families and American businesses I have observed in my 33-year career.

This first tip came to me from my friend Lee, a retired engineer with a curious mind who always cleverly thinks through issues. This tip involves one of the most attractive features of the new law: the additional $6,000 deduction for seniors aged 65 and over. For married couples, this deduction is doubled to $12,000. This deduction begins to phase out when AGI income reaches $75,000 for taxpayers filing single and $150,000 for married couples.

In Lee's case, the combination of both spouses' Social Security income and his Required Minimum Distribution put them over the $150,000 threshold, reducing their senior deduction. What Lee came up with: instead of filing married jointly, what if the couple filed married filing separately? By adopting this filing method, the family was able to save nearly $5,000 in Federal income taxes. Well done, Lee.

The OBBA provides up to a $10,000 deduction for interest paid on a car loan for a new vehicle whose final assembly occurred in the U.S. This deduction begins phasing out with income above $100,000 single or $200,000 for joint filers. For households with spouses at divergent income levels, filing married filing separately and having the new car purchased in the lower-income spouse's name can allow the auto interest deduction to be fully utilized.

As we get into tax filing season, it's going to be especially important to have tax preparers and/or tax software model different filing status techniques to take full advantage of the tax code of the OBBA. The OBBA appears clearly designed to incentivize certain types of behavior by taxpayers. Understanding these incentives and how they can be utilized to save taxes is going to be both important and a little fun for financial geeks like me.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss. Past performance is not a guarantee of future results.

Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.