1. Filing status & income
MAGI here is modified adjusted gross income — for most filers with no foreign income or certain exclusions, this is close to the AGI on last year's return, adjusted for this year's income. Not sure of your bracket? See the reference table below the results.
2. Qualified tips
Schedule 1-A's instructions (clarified 2026-03) cap the deduction at this net profit minus deductions allocable to the business -- not raw net profit. If you claim any of these against this business, enter the amounts below so the ceiling is accurate. Leave blank if none apply.
3. Qualified overtime compensation
This is only the extra half-time premium on overtime hours — not your full overtime pay. If you already know the figure (for example, tax year 2025+ W-2s show it in Box 14 as "FLSA OT Prem"), enter it directly. Otherwise compute it from your hours below.
Add a row per hourly rate you were paid overtime at this year: rate, overtime hours in a typical week at that rate, and how many weeks. Premium = rate × 0.5 × overtime hours × weeks. Worked at two different rates in the same week? Use this portfolio's own blended-rate overtime calculator first and enter its overtime-premium-per-hour figure as the rate here — that FLSA weighted-average arithmetic is already built and tested there.
Fill in filing status, MAGI, tips, and overtime above, then click Calculate.
Estimate
| Deduction | Amount |
|---|
What this does not cover
- Not a full tax return. This estimates two deductions only — not your total tax liability, other deductions or credits, self-employment tax, or state tax.
- Occupation eligibility for tips is confirmed by you, not verified against Treasury's official list here — check the published Treasury Tipped Occupation Code list before filing.
- FICA/SECA and state tax are unaffected — see the footer disclaimer.
- 2026 W-2 changes: starting with tax year 2026, employers report a Treasury Tipped Occupation Code in Box 14b and qualified tips under code "TP" in Box 12; qualified overtime premium appears in Box 14 as "FLSA OT Prem". Use those figures directly if you have them.
2025 federal marginal tax brackets (reference)
For choosing the rate above. Sourced from the IRS's published 2025 brackets; verify current-year brackets before filing, and remember your marginal rate is the rate on your last dollar of income, not your average rate.
| Rate | Single | Married filing jointly |
|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 |
| 12% | $11,925 – $48,475 | $23,850 – $96,950 |
| 22% | $48,475 – $103,350 | $96,950 – $206,700 |
| 24% | $103,350 – $197,300 | $206,700 – $394,600 |
| 32% | $197,300 – $250,525 | $394,600 – $501,050 |
| 35% | $250,525 – $626,350 | $501,050 – $751,600 |
| 37% | over $626,350 | over $751,600 |
Common questions
How much can I deduct under 'no tax on tips'?
Up to $25,000 of qualified cash tips per year, for tax years 2025 through 2028, if your occupation is on Treasury's published list of occupations that customarily and regularly receive tips. The deduction phases out for higher earners -- see the phase-out question below.
How much can I deduct under 'no tax on overtime'?
Up to $12,500 per year (single or head of household) or $25,000 (married filing jointly) of qualified overtime compensation, for tax years 2025 through 2028 -- but only the FLSA 'half-time' premium portion of overtime pay (the extra 0.5x for hours over 40 in a week), not your full time-and-a-half overtime wages. If you earned $30/hr on overtime hours from a $20/hr regular rate, only the $10/hr premium counts, not the full $30/hr.
What is the income phase-out for these deductions?
Both deductions are reduced by $100 for every $1,000 (or part of $1,000) that your modified adjusted gross income (MAGI) exceeds $150,000 (single or head of household) or $300,000 (married filing jointly). The tip deduction reaches $0 at $400,000 MAGI single / $550,000 joint. The overtime deduction reaches $0 at $275,000 MAGI single or head of household (its cap is smaller) / $550,000 joint.
Do these deductions reduce Social Security, Medicare, or state income tax?
No. Both are federal income-tax deductions only. Your tips and overtime pay remain fully subject to Social Security and Medicare (FICA) tax if you are an employee, or self-employment (SECA) tax if you are self-employed, and most states will still tax them in full unless that state has separately chosen to conform to the federal deduction.
Can I claim these if I file married filing separately?
No. Both deductions require married taxpayers to file a joint return; married filing separately is not eligible for either one.
Is this tax advice?
No. This calculator applies the published statutory caps and phase-out formula to the numbers you enter. It is not a full tax return, it does not know your complete tax situation, and it is not a substitute for reviewing the IRS's own guidance or consulting a qualified tax professional before you file.