Arguably the most discussed topics to come out of the One Big Beautiful Bill Act (OBBBA) are the taxation of tips and overtime. Practitioners need to understand these provisions now, as they are effective for 2025 tax returns. This program provides practitioners with the background currently available to advise clients regarding these two important tax developments. Both employers and employees need to understand these timely changes to taxation.
Major Topics
$12,500 deduction per individual for qualified overtime pay
Payment of overtime under the Fair Labor Standards Act (FLSA)
Calculating the “premium portion” of the extra half-time pay
Social Security and Medicare withholding
Employer furnishing the record of qualified overtime compensation to employees
Definition of a qualified tip
IRS list of traditionally-tipped occupations
$25,000 deduction for reported tips
The transition rule allowing employers to indicate the approximate amount designated as tips or overtime
State tax issues relating to tips and overtime
Changes in the W-2 reflecting new employer reporting responsibilities
Required Knowledge: Basic
Advanced Preparation: None
Who Should Attend: All accounting and finance practitioners