Who can claim the no tax on tips deduction?

Workers who receive and report tips to employers may be eligible to deduct up to USD 25,000 of tip income for 2025 to 2028. They must keep daily tip logs, employer reports, and bank records, then file the Schedule 1-A IRS form with their return. Accuracy and matching employer data are essential.

How do I use the Schedule 1-A IRS form?

Collect your records for tips and overtime, complete the Schedule 1-A IRS form with the eligible amounts, and attach it to your federal return. Keep logs, timesheets, and employer statements that reconcile to the filed numbers. Store copies for at least four years in case the IRS requests support.

What is the overtime deduction 2025 and what records are needed?

It allows qualifying workers to deduct overtime pay within set limits for 2025 to 2028. Keep rosters, timesheets, payslips, and contracts that separate base and overtime rates. Confirm employer totals match what you claim. Good documentation reduces error risk and helps smooth processing at tax time.

Could these US changes affect ASX-listed companies?

Yes. Larger US refunds can lift discretionary purchases in dining, travel, and electronics, benefiting Australian companies with US exposure in logistics, payments, or services. Retailer guidance, bookings, and payments data around tax season can feed into ASX sentiment, especially for consumer and small-cap growth names.

What should employers with US staff do now?

Map POS, timekeeping, and payroll data to capture tips and overtime correctly. Update policies, train managers, and test reconciliations so employee statements match filed figures. Plan for potential W-2 changes in 2026. Early preparation reduces rework, cuts dispute risk, and supports compliant filings for staff.

Global Market Insights

February 21: Tax filing deadline spike on new US tip/overtime deductions

ByHuzaifa Zahoor February 21, 2026February 21, 2026

As search interest spikes on 21 February, the tax filing deadline is in focus for US workers and investors in Australia. New no tax on tips deduction up to USD 25,000 and a no tax on overtime deduction for 2025 to 2028 both require the Schedule 1-A IRS form. These rules can shift refunds and spending, which we track for retail and travel demand. Employers also face extra reporting that may affect margins. We explain what matters before the tax filing deadline.