OBBB Tax Savings Calculator: How Much More Will You Keep?
OBBB Tax Savings Calculator: How Much More Will You Keep?
The One Big Beautiful Bill (OBBB) introduced the most significant set of tax changes since the 2017 Tax Cuts and Jobs Act. New above-the-line deductions for tips, overtime, car loan interest, and seniors — plus an expanded Child Tax Credit and higher SALT cap — will put real money back in millions of taxpayers’ pockets. But how much will you actually save?
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
This article walks through five real-world taxpayer profiles and calculates their before-OBBB versus after-OBBB tax liability, line by line. All calculations use the 2026 tax year (returns filed in 2027) with the OBBB provisions fully in effect.
Key OBBB Provisions Used in These Calculations
Before diving into the profiles, here are the OBBB provisions that affect the calculations below:
| Provision | Details |
|---|---|
| Tips deduction | Up to ~$25,000 above-the-line deduction for tips received by employees and self-employed workers |
| Overtime deduction | Up to |
| Car loan interest deduction | Up to ~$10,000 for interest on auto loans for vehicles with final assembly in the U.S. |
| Senior standard deduction boost | Additional ~$6,000 deduction for taxpayers age 65+ |
| Child Tax Credit | Increased to ~$2,200 per qualifying child (from ~$2,000) |
| SALT deduction cap | Raised to ~$40,000 (from ~$10,000), with phase-out starting at ~$500,000 AGI |
| Standard deduction (2026) | ~$16,100 single / ~$32,200 MFJ |
| Trump Account | ~$1,000 government-seeded investment account for qualifying children (starting July 2026) |
All new deductions are reported on Schedule 1A, a new IRS form created specifically for OBBB provisions.
Profile 1: Restaurant Server — $35K Wages + $12K Tips
Meet Maria: A full-time restaurant server in Austin, TX. She earned ~$35,000 in base wages and ~$12,000 in reported tips in 2026. Single filer, no dependents.
Before OBBB
| Line Item | Amount |
|---|---|
| Wages + Tips | ~$47,000 |
| Above-the-line deductions | ~$0 |
| Adjusted Gross Income (AGI) | ~$47,000 |
| Standard deduction | ~$16,100 |
| Taxable income | ~$30,900 |
| Federal income tax | ~$3,478 |
| Effective tax rate | ~7.4% |
After OBBB
| Line Item | Amount |
|---|---|
| Wages + Tips | ~$47,000 |
| Tips deduction (Schedule 1A) | -~$12,000 |
| Adjusted Gross Income (AGI) | ~$35,000 |
| Standard deduction | ~$16,100 |
| Taxable income | ~$18,900 |
| Federal income tax | ~$2,038 |
| Effective tax rate | ~4.3% |
Maria’s OBBB Savings: ~$1,440/year
The tips deduction is the single most impactful OBBB provision for tipped workers. Maria’s ~$12,000 in tips is fully deductible because it falls well under the ~$25,000 cap. Her taxable income drops by ~$12,000, saving her roughly ~$120/month.
Profile 2: Nurse With Regular Overtime — $75K Base + $20K Overtime
Meet James: A registered nurse in Columbus, OH. He earned ~$75,000 in base salary and ~$20,000 in overtime pay during 2026. Single filer, no dependents.
Before OBBB
| Line Item | Amount |
|---|---|
| Total wages (including overtime) | ~$95,000 |
| Above-the-line deductions | ~$0 |
| Adjusted Gross Income (AGI) | ~$95,000 |
| Standard deduction | ~$16,100 |
| Taxable income | ~$78,900 |
| Federal income tax | ~$12,748 |
| Effective tax rate | ~13.4% |
After OBBB
| Line Item | Amount |
|---|---|
| Total wages (including overtime) | ~$95,000 |
| Overtime deduction (Schedule 1A) | -~$12,500 |
| Adjusted Gross Income (AGI) | ~$82,500 |
| Standard deduction | ~$16,100 |
| Taxable income | ~$66,400 |
| Federal income tax | ~$9,998 |
| Effective tax rate | ~10.5% |
James’s OBBB Savings: ~$2,750/year
James earns ~$20,000 in overtime, but the overtime deduction caps at ~$12,500 for single filers. He still saves significantly — roughly ~$229/month — because the deduction comes off the top of his income in the 22% bracket. The remaining ~$7,500 in overtime above the cap is taxed normally.
Profile 3: Family With 3 Kids and a New Car Loan
Meet the Garcias: A married couple in Phoenix, AZ. Combined income ~$110,000 (all W-2). Three children ages 4, 8, and 11. They purchased a Ford F-150 (assembled in Dearborn, MI) in 2026 and pay ~$4,800/year in auto loan interest.
Before OBBB
| Line Item | Amount |
|---|---|
| Combined wages | ~$110,000 |
| Above-the-line deductions | ~$0 |
| Adjusted Gross Income (AGI) | ~$110,000 |
| Standard deduction (MFJ) | ~$32,200 |
| Taxable income | ~$77,800 |
| Federal income tax (before credits) | ~$8,898 |
| Old Child Tax Credit (3 x ~$2,000) | -~$6,000 |
| Federal income tax (after credits) | ~$2,898 |
| Effective tax rate | ~2.6% |
After OBBB
| Line Item | Amount |
|---|---|
| Combined wages | ~$110,000 |
| Car loan interest deduction (Schedule 1A) | -~$4,800 |
| Adjusted Gross Income (AGI) | ~$105,200 |
| Standard deduction (MFJ) | ~$32,200 |
| Taxable income | ~$73,000 |
| Federal income tax (before credits) | ~$8,338 |
| New Child Tax Credit (3 x ~$2,200) | -~$6,600 |
| Federal income tax (after credits) | ~$1,738 |
| Effective tax rate | ~1.6% |
The Garcias’ OBBB Savings: ~$1,160/year
The Garcias benefit from two OBBB provisions. The car loan interest deduction saves them ~$560 on their F-150 loan interest (the vehicle qualifies because it was assembled in the U.S.). The expanded Child Tax Credit at ~$2,200 per child (up from ~$2,000) adds another ~$600 in savings across three children. Combined, that is roughly ~$97/month.
Additionally, all three children qualify for Trump Accounts starting July 2026, receiving a one-time ~$1,000 government seed per child (a ~$3,000 total benefit not reflected in the tax calculation above).
Profile 4: Retired Couple, Age 67
Meet Robert and Linda: Both are 67 years old, retired, and living in Sarasota, FL. Their combined income is ~$62,000: ~$38,000 from Social Security (partially taxable) and ~$24,000 from retirement account withdrawals. Married filing jointly.
Before OBBB
| Line Item | Amount |
|---|---|
| Social Security benefits | ~$38,000 |
| Taxable portion of SS (~50%) | ~$19,000 |
| Retirement account withdrawals | ~$24,000 |
| Gross income | ~$43,000 |
| Above-the-line deductions | ~$0 |
| Standard deduction (MFJ, 65+ both) | ~$32,200 + ~$3,200 (extra age deduction) = ~$35,400 |
| Taxable income | ~$7,600 |
| Federal income tax | ~$760 |
| Effective tax rate (on total income) | ~1.2% |
After OBBB
| Line Item | Amount |
|---|---|
| Social Security benefits | ~$38,000 |
| Taxable portion of SS (~50%) | ~$19,000 |
| Retirement account withdrawals | ~$24,000 |
| Gross income | ~$43,000 |
| Senior deduction (Schedule 1A) | -~$6,000 |
| Adjusted Gross Income | ~$37,000 |
| Standard deduction (MFJ, 65+ both) | ~$35,400 |
| Taxable income | ~$1,600 |
| Federal income tax | ~$160 |
| Effective tax rate (on total income) | ~0.3% |
Robert and Linda’s OBBB Savings: ~$600/year
The new senior deduction of ~$6,000 is available to taxpayers 65 and older and stacks on top of the existing age-based standard deduction increase. For Robert and Linda, it nearly eliminates their entire federal tax liability, saving them ~$50/month. Note: only one ~$6,000 senior deduction applies per return (not per spouse).
Profile 5: High-Income Professional in NJ — $350K + High SALT
Meet David: A corporate attorney in Bergen County, NJ. Salary ~$350,000. Single filer, no dependents. Pays ~$28,000/year in state and local taxes (NJ income tax + property tax).
Before OBBB
| Line Item | Amount |
|---|---|
| Salary | ~$350,000 |
| Above-the-line deductions | ~$0 |
| Adjusted Gross Income (AGI) | ~$350,000 |
| Itemized deductions | |
| — SALT (capped at old ~$10,000) | ~$10,000 |
| — Mortgage interest | ~$18,000 |
| — Charitable contributions | ~$5,000 |
| Total itemized deductions | ~$33,000 |
| Taxable income | ~$317,000 |
| Federal income tax | ~$69,647 |
| Effective tax rate | ~19.9% |
After OBBB
| Line Item | Amount |
|---|---|
| Salary | ~$350,000 |
| Above-the-line deductions | ~$0 |
| Adjusted Gross Income (AGI) | ~$350,000 |
| Itemized deductions | |
| — SALT (new ~$40,000 cap) | ~$28,000 |
| — Mortgage interest | ~$18,000 |
| — Charitable contributions | ~$5,000 |
| Total itemized deductions | ~$51,000 |
| Taxable income | ~$299,000 |
| Federal income tax | ~$63,687 |
| Effective tax rate | ~18.2% |
David’s OBBB Savings: ~$5,960/year
The raised SALT cap is by far the most valuable OBBB provision for high-income taxpayers in high-tax states. David’s actual SALT of ~$28,000 was previously capped at ~$10,000, meaning he lost ~$18,000 in deductions. Under the OBBB, his full ~$28,000 is deductible (well under the new ~$40,000 cap). At his marginal rate, this saves him roughly ~$497/month.
Note: The ~$40,000 SALT cap begins to phase out at ~$500,000 AGI. Since David earns ~$350,000, he receives the full benefit.
Summary: OBBB Savings by Profile
| Profile | Filing Status | Income | Key OBBB Provision | Annual Savings |
|---|---|---|---|---|
| Maria (server) | Single | ~$47,000 | Tips deduction | ~$1,440 |
| James (nurse) | Single | ~$95,000 | Overtime deduction | ~$2,750 |
| The Garcias (family) | MFJ | ~$110,000 | Car loan + CTC | ~$1,160 |
| Robert & Linda (retired) | MFJ | ~$62,000 | Senior deduction | ~$600 |
| David (attorney) | Single | ~$350,000 | SALT cap increase | ~$5,960 |
How to Calculate Your Own Savings
- Identify which OBBB provisions apply to you. Review the complete OBBB comparison guide to see every change.
- Calculate your AGI with and without the new deductions. Add up any tips, overtime, car loan interest, or senior deduction you qualify for.
- Apply the correct standard deduction or itemize. If you pay high SALT, the new ~$40,000 cap may make itemizing worthwhile for the first time.
- Compute your tax using the 2026 brackets.
- Subtract credits. Apply the new ~$2,200 CTC and any other credits you qualify for.
- Compare. The difference between your old-law liability and your OBBB liability is your savings.
For a quick bracket check, use our tax bracket calculator. For a full deduction list, see our complete deductions guide.
Frequently Asked Questions
Do I need to do anything special to claim these OBBB deductions?
Yes. The new deductions for tips, overtime, car loan interest, and the senior deduction are all reported on Schedule 1A, a new IRS form. Most tax software will handle this automatically, but if you file manually, you must include Schedule 1A with your Form 1040.
Can I claim both the tips deduction and the overtime deduction?
Yes. They are separate deductions with separate caps. A server who earns both tips and overtime pay could deduct up to ~$25,000 in tips and up to ~$12,500 in overtime (single) in the same year.
When do these provisions take effect?
All OBBB tax provisions apply starting with the 2026 tax year (returns filed in 2027). They do not apply to 2025 returns filed in 2026. The filing deadlines guide has the complete 2026 calendar.
Do these savings apply to state taxes too?
It depends on your state. States that automatically conform to the federal tax code will generally honor the new deductions. States that decouple from the federal code may not. See our state-by-state analysis for tips deduction conformity.
Is the SALT cap really $40,000 now?
Yes. The OBBB raised the state and local tax (SALT) deduction cap from ~$10,000 to ~$40,000. However, the deduction begins to phase out for taxpayers with AGI above ~$500,000. See our detailed SALT deduction guide.
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.