Strand, Sperat and Associates

01/27/2026

01/08/2026

The announced Monday, January 26, 2026, as the opening of the nation’s 2026 filing season. You will have until Wednesday, April 15, 2026, to file your 2025 tax returns and pay any tax due. Don’t forget that IRS.gov has online tools and resources you can use before, during and after filing your federal tax return. For a list of filing season tools, reminders and resources, read: https://ow.ly/1yqq50XTweL

01/02/2026

How Overtime is Reported for 2025

The One, Big, Beautiful Bill Act (OBBBA), enacted in July 2025, allows eligible individuals to deduct the "premium" portion (the extra "half" in "time-and-a-half" pay) of their qualified overtime compensation from their federal income tax.

No new form for 2025: The IRS did not update Form W-2 for the 2025 tax year to include a specific box for deductible overtime.
Employer Discretion: While not required, some employers may choose to report the qualified overtime amount in Box 14 of the W-2 or provide a separate year-end statement or online portal access to the information.

Future Reporting: For the 2026 tax year, employers will be required to report this amount in Box 12 using code "TT".
How to Claim the Deduction

If your employer does not provide a separate breakdown on your W-2 or another statement, the IRS allows you to use a reasonable method to determine the deductible amount yourself. You should keep records of how you calculated the amount, such as pay stubs or earning statements.

To calculate the deductible amount:
Identify total overtime pay: Find the total amount of gross overtime compensation paid to you in 2025 on your final pay stub or earnings statement.

Calculate the "premium" portion: For standard "time-and-a-half" overtime, the deductible "premium" portion is one-third of the total overtime amount.

Example: If your total overtime pay for the year was $15,000, you can use $5,000 as your qualified overtime compensation amount ($15,000 / 3).
Claim on your return: When you file your 2025 federal income tax return (in early 2026), you can claim this deduction. The deduction is available even if you don't itemize.

Deduction Limits:

Maximum Amount: The maximum annual deduction is $12,500 for single filers and $25,000 for married couples filing jointly.
Income Phase-Outs: The deduction begins to phase out if your modified adjusted gross income (MAGI) exceeds $150,000 (single filers) or $300,000 (joint filers).

Important Notes:

This deduction only applies to federal income tax. Social Security and Medicare (F**A) taxes still apply to all overtime wages.

12/11/2025

2025 Income Tax filing season opens January 26, 2026 call and schedule your appointment. Our schedule fills very quickly. We have (5) associates so we will do our best to accommodate your needs. Preparation for Standard, Small Business along with Rentals returns which includes your state and local.. proudly can say we have clients from coast to coast and across the waters to Hawaii! Call today, leave a message and staff will return your call..

12/05/2025

The has announced the 2026 annual contribution limits have increased to $24,500 for 401(k) plans and $7,500 for IRAs. Learn more about the rise in pension limits at https://ow.ly/usIS50Xr80z.