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This page The IRS He released his guidance of “tax on tax on” and “No tax on overtime services” of the Big Behle Good Bill Act (Obbba), because workers can seek a reduction in the tax year of 2025.
The president Donald Trump He signed OBBBA into law in July after thousands in Congress passed tax reform and spending cuts along party lines.
The law included “no tax on tips” and “no tax on overtime,” and the Treasury Department and the IRS are now providing guidance as the law is aimed at helping workers see their deductions.
The IRS notice said that taxpayers who are eligible for reduced income tax returns and more time may be required to determine those amounts separately this year as Form 1099 will not be renewed to file tax returns for the 2025 tax year.
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The IRS issued a new tax guidance that covers fair income from tips and overtime. (Lindoy Nicholson / UCG / Urfery Images Group via Getty Images) / Getty Images)
Taxpayers can review examples at IRS Directory That shows how the income and overtime deductions work on the eligible or undivided income they received.
Under the obbba, workers who receive Qualified advice it can reduce the annual maximum of $25,000 and the deduction categories except for taxpayers with adjusted gross income of more than $150,000 (or $300,000 for joint filers).
IRS estimates where available 6 million workers reporting trend wagesand the additional deduction applies to tax years 2025 through 2028.
Eligible employees can deduct $25,000 in tips. (Lindoy Nicholson / UCG / Urfery Images Group via Getty Images) / Getty Images)
“No Tax on Overtime Overtime” allows people who receive overtime compensation to receive pay that exceeds their regular pay – called a WIME W-2, which is reported on a 1099 or other prescribed statement provided.
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The maximum annual deduction is $12,500 (or $25,000 for joint filers) and the deduction categories except for taxpayers with adjusted gross income over $150,000 (or $300,000 for joint filers). Notably, deductions are available for discretionary and ungrateful taxpayers.
This page Labor Law of Workers It requires most workers to be paid at least the union minimum wage for all hours worked and overtime pay with at least one regular pay period of work over 40 hours per week.
President Donald Trump has made “NO PROMISE EASY AND YOUR AGE” An important part of his economic agenda that was included in Obbba. (Win McNamee/Getty Images)
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However, some workers are exempt from additional rules, such as those who are paid a salary of at least $1,128 per week or $58,656 per year, or workers in certain job roles.
Additionally, the IRS said it is in the process of updating income tax forms and instructions for taxpayers to take advantage of this grace period to help them get this deduction.
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The first date of the filing period for the 2025 tax year is yet to be announced, although it has been in late January in recent years.
