President Donald Trump’s landmark spending bill is ready to be signed into law after Republicans in both chambers of Congress eked out the necessary votes ahead of the GOP’s self-imposed July 4 deadline to send the legislation to the president’s desk.
At its core, the bill permanently extends the tax cuts introduced in the 2017 Tax Cuts and Jobs Act while introducing a raft of new breaks. Some, such as an expanded child tax credit and an above-the-line deduction for charitable contributions, are permanent changes to the tax code.
Others are slated to expire in 2028, at the end of Trump’s term in office.
That doesn’t mean they necessarily will. After all, the cuts from the TCJA were slated to sunset this year, a reality that “lawmakers across the board and … across the aisle” were hoping to avoid entering budget negotiations, Erica York, vice president of federal tax policy at the Tax Foundation, recently told CNBC Make It.
Still, as of now, four provisions — including some that Trump campaigned on — aren’t slated to stick around for long.
above-the-line deduction for tips earned by workers in occupations that traditionally receive tips. That means a bartender, for instance, would be able to deduct the total amount of their tips from their taxable income in a given year.
The deduction phases out for individuals making more than $150,000 a year, or $300,000 a year for joint filers. Taxpayers can deduct a maximum of $25,000.
The exemption also applies only to federal income tax. Tipped workers would still be subject to state and local income and payroll taxes.
deduction of up to $10,000 for new auto loans. To qualify, your loan must have been taken out after Dec. 31, 2024 for a U.S.-assembled car, minivan, van, sport utility vehicle, pickup truck or motorcycle for personal use.
The deduction starts to lose value for filers with incomes exceeding $100,000, or $200,000 for joint filers.
The average driver paid $1,332 of annual loan interest charges on new cars bought in 2024, according to AAA. To qualify for the full $10,000 deduction, you’d have to take out a loan of roughly $112,000 — a description of only about 1% of new car loans, according to data from Cox Automotive.
