Trump’s 2025 Tax Law Gave Breaks on Tips and Overtime, but Benefits Expire in 2028

Tipped workers, overtime-eligible employees, and seniors receiving Social Security are among the groups who received tax breaks under the One Big Beautiful Bill Act signed by President Donald Trump on July 4, 2025. The law provides a tax deduction for some tipped income, with an estimated 5.5 million Americans benefiting from an average deduction of over $7,100. Tipped workers can exclude up to $11,000 in tips from taxable income, though tax savings depend on the individual’s tax bracket. The tax break on tips expires in 2028. The law also provides a tax break for overtime-eligible workers, but excludes independent contractors, self-employed individuals, and certain professional workers. The overtime tax break expires in 2028. The law grants an additional $6,000 tax deduction to seniors aged 65 and older, but only about half of Social Security recipients benefit, and the break expires in 2028. The law expanded 529 education savings accounts to cover homeschooling expenses, including curriculum, tutoring, and online programs.