TaxCompass PRO 2026

Schedule 1-A Overtime & Tips Calculator

Calculate Savings ↓
Verified for 2026 Tax Season & IRS Form W-2 Box 14

How much will you save with No Tax on Tips & Overtime?

The One Big Beautiful Bill Act (OBBBA) introduces an above-the-line deduction on IRS Schedule 1-A. Calculate your exact federal and state take-home pay boost, deduction caps ($12,500 Single / $25,000 MFJ), phase-out thresholds, and state tax rules.

⚡ Quick-Load Occupation Presets: Click to automatically populate realistic wages & hours
1

Filing Status & Residence State

Determines deduction limits & state tax rules

Form 1040
Single
$150k Cap
Married (MFJ)
$300k Cap
Head of House
$150k Cap
Separate (MFS)
$75k Cap
Texas (TX) 0% No Income Tax

Total gross earnings used to test phase-out reductions

$
$15k $75k $150k (Single Cap) $300k (MFJ Cap) $400k+
2

Overtime Compensation (FLSA Qualified)

Schedule 1-A Part III & Form W-2 Box 14

Max $12,500 Cap
$
416 hours annually
hrs/wk
0 hrs 10 hrs 20 hrs 40 hrs 60 hrs
3

Qualified Tipped Income

Schedule 1-A Part II & Form W-2 Box 7 (Max $25,000 Cap)

Max $25,000 Cap

Directly reported tips from eligible service occupations

$
$0 $10,000 $25,000 (Max Cap) $35,000 $50,000
Quick Add:
2026 Estimated Tax Savings
IRS Sched. 1-A
Total Annual Take-Home Boost
$0 (+$0/mo)

Based on estimated marginal federal & state tax rates.

Federal Exemption
$0
@ 22% bracket
State Exemption
$0
@ 0% (TX)
Gross OT Compensation: $0
Gross Tipped Income: $0
Total Qualified Deduction: $0
Phase-out Reduction: -$0 (0%)
🛡️
100% Eligible (Below Phase-out Cap)

Your estimated AGI is below the phase-out limit. You qualify for 100% of allowed deductions.

📍 State Tax Conformity Status Texas (TX)

Texas imposes 0% state individual income tax. You receive full federal tax relief.

📚 2026 IRS Schedule 1-A & OBBBA Key Rules

⏱️ Overtime Exemption Caps

The law exempts qualifying premium overtime pay up to a maximum cap of $12,500 for Single/HOH and $25,000 for Married Filing Jointly. The deduction is taken as an above-the-line adjustment on IRS Schedule 1-A.

💵 Qualified Tipped Income

Voluntary cash and credit card tips received in eligible service occupations are exempt up to $25,000 per individual.

📉 Phase-out Rules

Deductions phase out for Modified AGI exceeding $150,000 for Single and $300,000 for Married Filing Jointly, reducing allowable amounts until exhausted.