New federal tax breaks in President Donald Trump’s “One, Big, Beautiful bill” could benefit Utahns in ways some might not be aware of. The nonprofit Utah Association of Certified Public Accountants has honed in on five key tax strategies to help people navigate modifications.
“There are a lot of changes that I think will impact just about every taxpayer here in the state, whether you get overtime, whether you're getting tips,” said CEO Susan Speirs.
Overtime pay deductions:
“We have a lot of hourly workers here in the state. I mean, this is kind of a big deal. You know, when you're paid overtime, you get time and a half. So let's say you're making $50 an hour, and you work overtime, time and a half would put you at $75 an hour, the $25 is the overtime premium. So when you file your taxes for 2025, you can deduct up to $12,500 of that overtime premium if you're single, or $25,000 if you're married, filing joint(ly).”
Tip earner deduction:
If you earn tips waiting tables or driving an Uber, you’re in for savings — provided the tips are voluntary.
“Right now (2024), tips are included in income. They’re included on your W2, but that’s now changed with voluntary tipping. So let's say I'm a server at a restaurant and my customer tips me 20% voluntarily, I can deduct up to $25,000 a year of tip income.”
Spiers said servers are often lower-wage earners and don't necessarily make a ton of money, so the new deduction is a real benefit. The average monthly wage for leisure and hospitality workers in Utah was $2,305 compared to $9,924 for information sector employees, according to 2024 Utah Department of Workforce Services data.
Senior bonus deduction:
The U.S. Census Bureau shows that more than 12% of Utahns are age 65 or over. That chunk of the state’s population stands to benefit from changes to the tax code.
“Now this one's kind of huge. If you turn 65 by the end of 2025, you get an additional $6,000 deduction that will lower your taxable income,” Spiers said. “This is on top of a standard deduction.”
“It could mean a $12,000 deduction for qualifying married couples. This deduction starts to phase out if you earn more than $75,000 as an individual or $150,000 as a couple.”
SALT deduction boost for property owners:
Latest figures show that 68.5% of Utahns own homes. There’s an increase in the deduction cap under SALT — state and local tax deduction.
“In the past, if you had more than $10,000 in state and local taxes, you lost the ability to reduce your tax liability, as you could not deduct amounts over that ceiling. Those who pay a lot in real estate taxes and state withholding taxes will see their income tax liabilities decrease because of the ability to now deduct up to $40,000.”
In 2024, the limit was $10,000. Under the new federal tax code, you may be able to deduct as much as $40,000 of taxes you paid in 2025.
Car loan interest deduction:
Utahns who took out a loan for a new vehicle assembled in the U.S. can capitalize on the new tax code, too.
“You may be able to deduct up to $10,000 of car loan interest. We haven't been able to deduct any sort of interest other than mortgage interest for years and years.”
The car, truck, minivan or even motorcycle must have a gross vehicle weight of under 14,000 pounds to qualify for the deduction on loan interest. Spiers points out that this applies to foreign vehicles under certain circumstances.
“Let's say you buy a Honda or foreign car; if the final assembly is here in the U.S., it's going to count.”
Side hustle bonus tip:
The Utah Association of Certified Public Accountants says not to ignore a 1099-K. With a growing gig economy, more Utahns may get one or more 1099-K forms for income from side hustles. If you collect business payments using apps like Venmo or PayPal, watch for the 1099-K form and be sure to report your actual income to the IRS. The agency receives a copy of this form, too, and mismatched income on your tax return can catch their eye.
