Here’s A Tip: Your Tips May Be Eligible For A Tax Deduction

(AP) – Millions of U.S. workers who earn tips and overtime pay may be eligible for a federal tax break when they file their 2025 income taxes next year. But which workers will qualify for the new deductions is among the details the government has to work out. Under a spending and policy bill President Donald Trump signed into law on July 4, the U.S. Treasury Department must publish a list by Oct. 2 of occupations that qualify for tax-free tips. Restaurant servers, bartenders and hairdressers are expected to be eligible. The Treasury Department is also expected to publish guidance on reporting overtime pay. The deduction provisions are set to expire after the 2028 tax year.