So from my understanding on what I read is i make $24.6 an hour and $36.9 OT so I can deduct $12.3 so 12.3 x 415 my OT hours would be $5100 so when I file my taxes do I take that out of my gross income like currently my gross income is $52,454 so would I put its $47,354? Because I was trying to use a tax calculator to estimate about how much I should get back want to make sure thats how ur supposed to do it or if we still gotta wait and find out
How will the no tax on overtime work for 2025 taxes
byu/Worried-Wall-5004 intax
Posted by Worried-Wall-5004
5 Comments
[removed]
That’s the gist of it, yes.
You wouldn’t lie on Line 1 about your gross income. If you earned $52,454 then that’s exactly what you’d write. You then later subtract from that amount all the stuff you’re allowed to subtract, including overtime, the standard deduction, &c.
The effect is exactly what you’re describing, though. You will save $612 of federal income tax by deducting $5,100 from your income (because that income is in the 12% tax bracket).
You may also save some state tax, depending on your state. Some tax overtime; some don’t.
It’s not quite that straightforward.
If you have FLSA mandated overtime, meaning your employer is covered by FLSA and you have OT in excess of 40 hours in a week, you may be able to deduct the overtime premium, the “half” portion of time and a half, to reduce your taxable income. There is a cap on how much you can deduct, and they are income limits, both based on your filing status
The $5100 in the overtime differential in your example will be on Schedule 1-A which gets added to the standard deduction or your itemized deduction. Thus dropping your income before calculating your tax.
FYI, employers will be required to reflect the qualified overtime on your W-2. That is the amount eligible as a potential deduction (potential as it is subject to limitations).