The One Big Beautiful Bill Act (OBBBA) adds an enhanced $6,000 standard deduction for taxpayers age 65 and older, on top of the regular standard deduction. This is in addition to the existing extra standard deduction for seniors and represents a significant tax reduction for retirees and older Americans.
This stacks on top of the existing additional standard deduction for seniors ($1,950 single / $1,550 each married). Combined with the regular 2026 standard deduction, seniors 65+ now have one of the largest standard deductions in history. Seniors who previously itemized should recalculate — the standard deduction may now exceed itemized deductions.
Seniors who itemize deductions cannot take the standard deduction — run both calculations to determine which saves more.
The One Big Beautiful Bill Act (OBBBA) creates a new deduction allowing qualifying workers to exclude overtime pay from federal taxable income. This directly benefits hourly workers, tradespeople, nurses, and anyone earning overtime wages under the Fair Labor Standards Act.
A worker earning $15,000/year in overtime pay at a 22% federal rate saves $3,300/year in federal income taxes under the new overtime deduction.
This is a brand-new deduction under the OBBBA — IRS guidance is pending. Workers should verify their employer is correctly reporting overtime on W-2 forms. The deduction applies to FLSA-qualifying overtime only — voluntary extra hours may not qualify.
A registered nurse in Texas regularly worked overtime, earning $15,000 in overtime pay in 2026. Before the OBBBA, all overtime was taxed as ordinary income. Under the new overtime pay deduction, Uncle Kam helped her exclude the qualifying overtime wages from federal taxable income. At her 22% marginal rate, the $15,000 in overtime pay generated a $3,300 reduction in federal taxes. Her employer correctly reported overtime on her W-2, and Uncle Kam ensured the deduction was properly claimed on her return.
Earn overtime pay? The new overtime deduction could save you thousands in 2026. Book a call to see how much you qualify for.
Be the Next Win — Book a CallThe One Big Beautiful Bill Act (OBBBA) creates a new federal income tax deduction for qualifying overtime wages paid under the Fair Labor Standards Act (FLSA). This means overtime pay received by W-2 employees for hours worked over 40 per week may be excluded from federal taxable income starting in 2026.
W-2 employees who receive overtime pay under the FLSA qualify. This includes hourly workers, nurses, tradespeople, construction workers, factory workers, and any employee who receives time-and-a-half for hours worked over 40 per week. Salaried exempt employees who do not receive FLSA overtime do not qualify.
No — the overtime deduction applies to FLSA-qualifying overtime paid to W-2 employees. Independent contractors and gig workers do not receive FLSA overtime and do not qualify for this deduction.
Savings depend on your total overtime pay and your marginal tax rate. A worker earning $15,000 in overtime at a 22% rate saves $3,300/year. A worker in the 24% bracket saves $3,600/year on the same overtime income.
Your employer must correctly report overtime pay on your W-2. IRS guidance on the specific form and line for claiming the deduction is pending. Uncle Kam will ensure the deduction is properly claimed on your 2026 tax return.
The One Big Beautiful Bill Act (OBBBA) creates a new deduction allowing workers in tip-based industries to exclude qualifying tip income from federal taxable income. This is one of the most significant new deductions for service industry workers in decades.
A restaurant server earning $20,000/year in tips at a 22% federal rate saves $4,400/year in federal income taxes under the new tip income deduction.
This is a brand-new deduction under the OBBBA — the IRS has not yet issued full guidance. Employers in tip-based industries should update payroll reporting immediately. Self-employed workers who receive tips should consult a tax advisor on how to claim the deduction on Schedule C.
A server at a high-volume restaurant in Miami earned $22,000 in reported tips in 2026. Before the OBBBA, all of that tip income was fully taxable as ordinary income. Under the new tip income deduction, Uncle Kam helped her exclude the qualifying tip income from federal taxable income. At her 22% marginal rate, the $20,000 in qualifying tips generated a $4,400 reduction in federal taxes. Her employer updated payroll reporting to correctly classify tip income, and Uncle Kam ensured the deduction was properly claimed on her return.
Work in a tip-based industry? The new tip income deduction could save you thousands in 2026. Book a call to see how much you qualify for.
Be the Next Win — Book a CallThe One Big Beautiful Bill Act (OBBBA) creates a new federal income tax deduction for qualifying tip income received by workers in tip-based industries. This means tips received by servers, bartenders, hair stylists, delivery drivers, and other service workers may be excluded from federal taxable income starting in 2026.
Workers in industries where tipping is customary qualify, including restaurant and food service workers, hotel and hospitality staff, hair stylists and barbers, nail technicians, delivery drivers, and similar service workers. Tips must be properly reported to the employer on W-2 or 1099 forms.
Yes — tips must still be reported to your employer and on your tax return. The deduction reduces your taxable income, but the reporting requirement remains. Unreported cash tips do not qualify for the deduction and still carry audit risk.
IRS guidance is still pending on self-employed tip income. Workers who receive tips as independent contractors should consult a tax advisor to determine how the deduction applies to their Schedule C income.
Savings depend on your total tip income and your marginal tax rate. A worker earning $20,000 in tips at a 22% rate saves $4,400/year. A worker in the 24% bracket saves $4,800/year on the same tip income.
Most taxpayers leave the QBI deduction unclaimed — it reduces taxable income by up to 23% starting 2026 under the OBBBA.
HSA contributions offer a triple tax advantage — deductible, tax-free growth, tax-free withdrawals.
Charitable donations of appreciated stock avoid capital gains AND generate a full fair-market-value deduction.
