Free calculator · United States · tax years 2025-2028
No tax on tips & overtime calculator: what you keep
The short answer: tips are deductible up to $25,000 and overtime premium up to $12,500 ($25,000 joint), both phasing out above $150,000 of income, for tax years 2025 through 2028. Slide your numbers in and see the deduction you keep and the federal tax it saves under the 2026 brackets.
Joint filers: enter the household's combined wages. The phaseout works on your combined income.
Voluntary cash and card tips, including tip sharing. The deduction caps at $25,000.
Only the premium counts: on time-and-a-half, that is the extra half, not the whole overtime paycheck. Your W-2 box shows it from 2026.
How it works: both deductions run for tax years 2025 through 2028 and you get them even if you take the standard deduction. Tips cap at $25,000; overtime premium caps at $12,500 single or $25,000 joint. Above $150,000 MAGI ($300,000 joint), each deduction shrinks by $100 for every $1,000 over. Two honest caveats: Social Security and Medicare tax still apply to every tipped and overtime dollar, and this is a federal deduction, so your state may still tax the lot. Claimed on Schedule 1-A with your return.
Based on: the OBBBA no-tax-on-tips and no-tax-on-overtime deductions; 2026 caps and phase-outs. Checked July 2026. Rules change; confirm against the official guidance before acting.
Your deductions and estimated saving, saved for tax time.
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Educational information, not financial advice. Figures current as of July 2026 where dated; allowances and rates change, so check the source before acting.