Salazar Business Services Blog

Does your Tax Preparer return your calls? 

Do you feel comfortable asking them  questions? 

Do you feel listened to and understood?

 With the right Tax Preparer, the answers should always be "Yes!"

¿Le devuelve su preparador de impuestos las llamadas? 

¿Se siente cómodo haciéndole preguntas? 

¿Se siente escuchado y comprendido? 

Con el preparador de impuestos adecuado, la respuesta siempre debería ser "¡Sí!".

 Here's a more detailed breakdown:

• Tax Deduction, Not Elimination:The OBBBA does not eliminate federal income tax on overtime pay entirely. Instead, it allows a deduction, meaning the tax is still calculated on the full amount of wages, but the deductible portion is subtracted before the final tax liability is calculated. 
• Deduction Amount:The deduction is capped at $12,500 for individuals and $25,000 for couples filing jointly. 
• Phase-out:The deduction begins to phase out for single filers earning $150,000 or more and for couples filing jointly earning $300,000 or more. 
• Temporary:This tax break is temporary, applying only to tax years 2025 through 2028. 
• Payroll Taxes Still Apply:While federal income tax on overtime pay is reduced, payroll taxes for Social Security and Medicare still apply. 
• State Taxes:The OBBBA only affects federal income taxes. State and local taxes on overtime pay are not impacted. 
• No Need to Itemize:The overtime deduction can be claimed even if you don't itemize deductions on your tax return.