Temporary Tax Relief: What Individuals Can Expect (2025–2029)

Updated: Jul 22

While many provisions of the new tax law bring long-term certainty, several temporary benefits are available to individual taxpayers between 2025 and 2029. These short-term incentives present planning opportunities – but also require careful timing to maximize their value.

Expanded SALT Deduction (But Only for a Limited Time)

The State and Local Tax (SALT) deduction cap – originally limited to $10,000 under the 2017 TCJA – will temporarily increase to $40,000 for both single and joint filers starting in 2025.

However:

The expanded SALT cap phases out for individuals earning above $500,000 (or $250,000 if married filing separately).
Between 2026 and 2029, the deduction and income thresholds will rise 1% annually.
In 2030, the SALT deduction returns to $10,000, regardless of income level.

Temporary Deductions and Credits (2025–2028 Only)

Several new deductions and credits are only available during the four-year window of 2025–2028. These include:

No Taxes on Tips or Overtime

You can deduct:

Up to $25,000 in tips
Up to $12,500 in overtime income ($25,000 for joint filers)
These deductions begin to phase out at $150,000 for single filers and $300,000 for joint filers.

Enhanced Senior Deduction

Taxpayers age 65 and older may claim an additional $6,000 deduction, on top of existing age-based deductions:

$2,000 for single filers
$3,200 for married filers
Phase-out begins at $75,000 (single) and $150,000 (joint filers).

Deductible Car Loan Interest

Taxpayers can deduct up to $10,000 in interest on loans for vehicles assembled in the U.S.

Eligibility:

AGI below $100,000 for single filers
AGI below $200,000 for joint filers
Car loan applies to new vehicles assembled in the United States (not used or leased), for personal use, and the loan must original on or after January 1, 2025.