Workers generally may claim the overtime pay deduction only for amounts reported on Form W-2, Wage and Tax Statement, beginning in tax year 2026, according to updated IRS FAQs. The IRS also clarified that the deduction does not make overtime pay exempt from gross income.
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TOPICS / INDIVIDUALS
Deductions
Planning for new charitable contribution limits
Thresholds and ceilings for individual and corporate deductions under the law known as the One Big Beautiful Bill Act may indicate a need for donation timing and other strategies.
‘Stacking’ charitable contributions up to the 60% limit
The OBBBA sought to clarify AGI‑based charitable contribution deduction limits but instead added uncertainty over how those limits apply.
Condo casualty losses: Deductions for common-interest property
When disaster strikes a condominium or planned community, owners often pay for common-area repairs — but don’t always get the casualty loss deduction they expect. This article addresses when deductions are allowed and how communities might restructure ownership to unlock tax benefits for their residents.
IRS finalizes deduction rules for tips, adds 3 eligible jobs
The final IRS regulations expand the tips deduction to 71 occupations and clarify rules on qualified tips, digital payments, and automatic gratuities.
Prop. regs. issued on new qualified tips deduction
The proposed regulations clarify points including the interaction of qualifying occupations for which tips are customarily received with ineligible specified service trades or businesses.
IRS releases FAQs on qualified overtime pay deduction under H.R. 1
An IRS fact sheet explains when overtime compensation qualifies for the H.R. 1 deduction and how Fair Labor Standards Act rules apply, including for federal employees.
Only deductible W-2 wages used in determining Sec. 199A deduction
Only deductible W-2 wages are included in calculating a taxpayer’s Sec. 199A qualified business income deduction.
IRS approves medical deduction for IVF, denies it for surrogacy
A recent IRS ruling clarifies a key distinction of expenses for in vitro fertilization.
Tax-advantaged ABLE accounts for disabled individuals
The accounts help persons with disabilities pay for qualified disability expenses.
Annual inflation adjustments announced for tax year 2026
The IRS published annual inflation adjustments for more than 60 tax provisions for tax year 2026, in addition to changes to the standard deduction for tax year 2025.
Details on IRS prop. regs. on tip income deduction
The proposed regulations define “qualified tips” for purposes of the deduction and contain details on allowable forms of payment.
Microcaptive insurance arrangements subject to new rules
To protect against certain risks, businesses can create “captive” insurance companies. The final regulations designate certain microcaptive arrangements as reportable listed transactions or transactions of interest.
Taxpayer denied theft loss deduction for investment loss
The Tax Court focused on the taxpayer’s role as president and managing director of the company in which he invested, along with his failure to prove a theft occurred.
Burden of proof: The shoebox method and 9-martini lunch
When taxpayers claim deductions for business expenses, they must meet their burden of proof with proper recordkeeping.
Dealing with sales between related persons
Losses may be disallowed for sales or exchanges between related parties.
Planning opportunities: Sec. 179 expensing vs. bonus depreciation
As bonus depreciation phases out, practitioners need to consider Sec. 179 expensing to maximize deductions on fixed-asset purchases.
Annual inflation adjustments announced for tax year 2025
The IRS on Tuesday provided its annual inflation adjustments for over 60 tax provisions in tax year 2025, including increases in the standard deduction for married couples and single individuals.
IRS increases special per diem rate for business travel
The special per diem rates that a taxpayer uses in travel and business expenses will be higher starting Oct. 1, as provided by the IRS.
Sec. 163(j) planning considerations
Businesses can explore several options to mitigate the interest deduction limitation under the Tax Cuts and Jobs Act.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
