The Internal Revenue Service has released a draft of a tax form to operationalize several provisions of the 2025 reconciliation act, known as the One Big Beautiful Bill Act, including limited deductions for qualified tips, overtime pay, car loan interest (for domestically assembled, personally used vehicles) and a new $6,000 deduction for seniors.
The Schedule 1-A draft outlines “additional deductions,” with instructions and more tip exemption guidance still to come, according to Tax Notes.
All four deductions were signed into law July 4 as part of the One Big Beautiful Bill Act. A preliminary fact sheet on the deductions was released July 14.
The deduction for seniors allows taxpayers 65 and older to claim a deduction of up to $6,000 for single filers and up to $12,000 for joint filers when both spouses qualify. "The deduction is in addition to the existing senior deduction under section 63(f)," Tax Notes explains.
The deduction is subject to phaseout for taxpayers with modified adjusted gross income over $75,000 for single filers and over $150,000 for joint filers. "Schedule 1-A requires taxpayers to calculate their modified AGI at the top of the form," Tax Notes points out. "The form also explicitly reminds taxpayers that they can claim the deduction only if they have a valid Social Security number."
As to taxes on tips, Treasury released a preliminary list in early September of 68 eligible job titles divided into eight industry categories, Tax Notes reported, and more guidance is expected to be released by Oct. 2.
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