No Tax on Tips & Overtime Calculator

Your yearly numbers

Enter yearly amounts. Leave anything that doesn't apply blank.

Roughly your total income before deductions, including the tips and overtime. Your AGI from last year's return is a good start.

No tax on tips

Voluntary cash and card tips in a listed tipped occupation — not automatic service charges. From 2026, look for W-2 box 12 code TP.

No tax on overtime

What does your overtime figure show?

From 2026, W-2 box 12 code TT shows the qualified amount (the extra half). For 2025, the IRS lets you use ⅓ of time-and-a-half pay or ¼ of double-time pay.

Seniors and car loans

You, and your spouse if filing jointly.

New U.S.-assembled vehicle, loan taken out after 2024.

Estimated federal income tax saved

$1,320.00

from $11,000.00 of new deductions on Schedule 1-A

Estimate · 2026 federal rules

Deductions you may claim

Qualified tips
$8,000.00
Qualified overtime (the premium)
$3,000.00
Senior deduction
$0.00
Car loan interest
$0.00
Total new deductions
$11,000.00

No caps or phase-outs apply at this income.

Federal income tax, before and after

Taxable income without them
$43,900.00
Taxable income with them
$32,900.00
Federal income tax without them
$5,020.00
Federal income tax with them
$3,700.00
Your top federal bracket
12%

Assumes the basic 2026 standard deduction and that all income is ordinary income. Social Security, Medicare and most state taxes are not reduced.

How the phase-out is worked out

For tips and overtime, the deduction drops by $100 for each full $1,000 your modified AGI is over $150,000 ($300,000 joint). For car loan interest it's $200 for each $1,000 or part of $1,000 over $100,000 ($200,000 joint). The senior deduction drops by 6% of modified AGI over $75,000 ($150,000 joint). Calculation tax.schedule-1a-deductions v1.0.0.

Calculator by Work & Money · sources & method