ITR Accounting and Tax

04/06/2026

A new rule suggests the deduction of qualified overtime compensation, but that does not mean all overtime pay. The benefit is limited to the overtime portion only.

11/29/2025

IRS releases guidance for tips and overtime deduction

https://www.cnbc.com/amp/2025/11/25/irs-guidance-trump-tips-overtime-deductions.html?fbclid=IwdGRjcAOYIgJjbGNrA5gh6WV4dG4DYWVtAjExAHNydGMGYXBwX2lkDDM1MDY4NTUzMTcyOAABHlDXNBjS8eTGZmugFX4cZwKN-4JXF7zu3t4CmLbNAoBen9l4zm398W5ZffZ-_aem_TN1iNaFvbFPpGnMvevysiw

The IRS has released guidance for President Donald Trump's tips and overtime deductions. Here's what workers need to know.

11/08/2025

(This Article is shared from Vlad Lapochkin):

Heads-up for everyone in tipped work 🍽️:

The IRS has proposed a new deduction for “qualified tips” starting in 2025. If you’re in an eligible occupation, earn tips (not automatic service charges), and report properly, you could reduce your taxable income.

✅ Eligible Payments: Cash, check, credit/debit cards, gift cards, electronic or mobile payments (Venmo, PayPal), and certain tokens (like casino chips).

⛔️ Ineligible Payments: Event tickets, meals, services, or other assets not exchangeable for a fixed cash amount (including most crypto).

Automatic Gratuities & Fees: Tips added automatically by a business - gratuities, service charges, or other mandatory fees - don’t count unless the customer is clearly given the option to accept, decline, or modify the amount without penalty.

😭 Cap on Deduction: Some Nevada lawmakers requested up to $50,000 for married couples where both spouses earn tips. The Treasury unfortunately rejected this; the annual cap is $25,000 per return, regardless of filing status.

💣 Specified Service Trade or Business (SSTB) Exception:

Certain occupations or business types are excluded. An SSTB is a business in fields like health, law, consulting, athletics, financial services, or the performing arts.

Example 1: A self-employed (1099) comedian performing at a venue receives tips → not eligible because the work falls under SSTB.
Example 2: A W‑2 bartender employed by a non-SSTB company at a theater receives tips → eligible because the employer is non-SSTB and the occupation qualifies.

Final rules may change. Expect refinements after public comments and the end of the government shutdown.

Got questions about tips or taxes? Send me a message - I’ve got you covered!

10/30/2025