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[Event] Ask the Experts: Tax Law Changes - One Big Beautiful Bill
The tips and overtime portion of the bill are not exclusions, but deductions that will reduce your taxable income. The IRS is working on the list of occupations that will receive the tips deduction and the forms that will be used as a reporting mechanism for both employers and employees for both the tips and overtime deductions.
The tips that can be included for the deduction are voluntary tips, not mandatory tips included as service charges as is sometimes common in restaurants when serving large parties.
The overtime will be the overtime requited by the Fair Labor Standards Act, not state overtime, or overtime required by a contract.
The deductions only affect federal income tax, not social security or Medicare. The employer will separately report qualified tips and qualified overtime on your W-2.
Please try a custom scenario in our Tax Reform Calculator.
You can also stay up to date on our One Big Beautiful Bill page.
Thanks for joining us today!
Cindy
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