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My Schedule 1-A

What the new deductions save you in 2026

Copy W-2 Box 12, code TT or TP.

Estimate, not tax advice. Federal income tax only. Based on the IRS 2026 draft Schedule 1-A.

Example below

Enter yours

SCHEDULE 1-A · 2026 · ESTIMATE

Example: single, $60k, $8k overtime premium

Overtime $8,000 →

−$960

federal tax (2026)

  1. Tips$0

    1. Rule ① Qualified tips: not reached
    2. Rule ② Filing status & SSN: not reached
    3. Rule ③ Income phase-out: not reached
    No tips entered

  2. Overtime$8,000

    $8,000 = $8,000

    1. Rule ① Overtime premium: passed
    2. Rule ② Filing status & SSN: passed
    3. Rule ③ Income phase-out: passed
    Income not over $150,000

  3. Car-loan interest$0

    1. Rule ① Interest paid: not reached
    2. Rule ② Filing status: not reached
    3. Rule ③ Income phase-out: not reached
    4. Rule ④ New · US-assembled · 2025+ loan: not reached
    No car-loan interest entered

  4. Senior 65+$0

    1. Rule ① Born before Jan 2, 1962: not reached
    2. Rule ② Filing status & SSN: not reached
    3. Rule ③ Income phase-out: not reached
    Nobody 65 or older
Total new deductions (line 44)
$8,000
Taxable income
$43,900 → $35,900
Your tax bracket
12%
Federal tax saved
$960

Estimate, not tax advice · IRS 2026 draft form

Doesn't change Social Security or Medicare tax · state tax may differ

Issued by plusbeauxjours (not the IRS)

Filing status

Form 1040 line 11. Type 60000, 60,000 or 60k.

65 or older
More: SSN, itemizing, remember (optional)

We use the larger of this and your standard deduction. The new deductions apply either way.

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How the estimate works

Four lines, one total, your tax with and without it

The One Big Beautiful Bill Act (Pub. L. 119-21) added four deductions for 2025 through 2028. You claim them on a new form, Schedule 1-A, whether you take the standard deduction or itemize. This calculator copies that form's arithmetic for tax year 2026, line by line, and shows how much less federal income tax you pay because of it.

  1. Enter your filing status and income. Use your adjusted gross income (Form 1040 line 11), including your overtime and tips. The tool treats it as your modified AGI, which is the same for most people.
  2. Copy the new W-2 amounts. Box 12 code TT is your overtime premium and code TP your tips. Add car-loan interest from Form 1098-VLI and tick 65+ if it applies.
  3. Each line runs its rules. A line lights up only when every rule passes: you have the amount, your filing status and SSN allow it, and income hasn't phased it out. The car loan has a fourth rule for the vehicle and the loan.
  4. We tax your income twice, with and without the new total, using the 2026 brackets (IRS Rev. Proc. 2025-32): the Tax Table method below $100,000 and the rate schedule above. The difference is your saving.

Worked example: single, $60,000, $8,000 overtime premium

The standard deduction is $16,100, so taxable income is $43,900 and tax is $5,023. The overtime premium is under the $12,500 cap and income is far below $150,000, so all of it is deducted: taxable income falls to $35,900 and tax to $4,063.

Overtime $8,000 → −$960 federal tax (2026), because every one of those dollars was taxed at 12%.

Why the paper tears the way it does

The phase-outs don't all round the same way, and the receipt draws each one literally. Tips and overtime lose $100 for each full $1,000 over the threshold, so the strip loses one $100 tooth per full thousand and $999 over leaves it whole. The car loan loses $200 for each $1,000 or part of one, so $1 over already bites a whole $200 tooth. The senior deduction shrinks by a flat 6%, so its cut is smooth.

Planning ahead? Our 2027 tax brackets calculator estimates next year's federal tax, the 401(k) paycheck calculator shows how much to set aside per paycheck, and retirees can check their January check with the 2027 COLA calculator.

The 4 rules, line by line

Schedule 1-A 2026 draft, Parts II to V

Line numbers are from the IRS 2026 Schedule 1-A draft (opens in a new tab) IRS draft. We'll re-check them against the final form when the IRS publishes it.

Tips (Part II, lines 9–15)

  • ① Tips in a job on the IRS list of tipped occupations, not at a specified service business.
  • ② A joint return if you're married; an SSN valid for work.
  • ③ Up to $25,000 per return (not doubled for couples), minus $100 for each full $1,000 of income over $150,000 ($300,000 joint). Line 13 rounds down.

Overtime (Part III, lines 21–27)

  • ① Overtime premium required by the Fair Labor Standards Act (W-2 box 12 code TT).
  • ② A joint return if you're married; an SSN valid for work.
  • ③ Up to $12,500 ($25,000 joint), minus $100 for each full $1,000 over $150,000 ($300,000 joint). Line 25 rounds down.

Car-loan interest (Part IV, lines 30–36)

  • ① Interest you paid in 2026 (Form 1098-VLI box 1).
  • ② Any filing status, including married filing separately.
  • ③ Up to $10,000 per return, minus $200 for each $1,000 or part of $1,000 over $100,000 ($200,000 joint). Line 34 rounds up.
  • ④ A new vehicle with final assembly in the US, a loan taken out after Dec 31, 2024, personal use, secured by the vehicle.

Senior (Part V, lines 37–43)

  • ① Born before Jan 2, 1962 (you, and your spouse on a joint return).
  • ② A joint return if you're married; an SSN for each person.
  • ③ $6,000 per person, minus 6% of income over $75,000 ($150,000 joint), in whole dollars.

The four lines add up on line 44, which goes to Form 1040 line 13a on the 2026 draft.

What counts as overtime premium

The half, not the time-and-a-half

Only the part of overtime pay that the federal Fair Labor Standards Act requires above your regular rate counts. At $20 an hour, overtime is paid at $30: the deductible premium is the $10. Box 12 code TT on your 2026 W-2 should already show just that part.

  • Counts: the extra half for hours over 40 in a workweek under the FLSA.
  • Doesn't count: pay above 1.5× (double time's extra half), holiday or weekend premiums without 40+ hours, state-only daily overtime, union-contract overtime beyond the FLSA.
  • No TT amount yet? Overtime hours × regular rate × 0.5 is a fair estimate; the “Don't have it yet?” helper does it for you.

Source: 2025 Form 1040 instructions, Schedule 1-A (opens in a new tab).

Tipped occupations (71)

The IRS list of jobs that customarily got tips by Dec 31, 2024

From the IRS list of Treasury Tipped Occupation Codes (opens in a new tab). Use find-in-page to search.

Beverage and food service

  • Bartenders TTOC 101Barkeep, mixologist, taproom attendant, sommelier
  • Wait staff TTOC 102Cocktail waitress, dining car server, banquet staff
  • Food or beverage servers, non-restaurant TTOC 103Room service food server, boat hop, beer cart server
  • Dining room and cafeteria attendants and bartender helpers TTOC 104Bar back, bar helper, busser
  • Chefs and cooks TTOC 105Executive chef, pastry chef, sous chef, fast food cook, private chef, restaurant cook, saucier, food truck cook, banquet cook, caterer, chocolatier, confectioner
  • Food preparation workers TTOC 106Salad maker, sandwich maker, fruit and vegetable parer, kitchen steward
  • Fast food and counter workers TTOC 107Barista, ice cream server, cafeteria server
  • Dishwashers TTOC 108Dish room worker, silverware cleaner
  • Host staff, restaurant, lounge, and coffee shop TTOC 109Maître d’hôtel, dining room host.
  • Bakers TTOC 110Bread baker, cake baker, bagel baker, pastry finisher

Entertainment and events

  • Gambling dealers TTOC 201Blackjack dealer, craps dealer, poker dealer, roulette dealer, pit clerk
  • Gambling change persons and booth cashiers TTOC 202Slot attendant, mutuel teller
  • Gambling cage workers TTOC 203Casino cashier, cage cashier
  • Gambling and sports book writers and runners TTOC 204Betting runner, bingo worker, keno runner, race book writer
  • Dancers TTOC 205Club dancer, dance artist
  • Musicians and singers TTOC 206Instrumentalist, accompanist, lounge singer
  • Disc jockeys, except radio TTOC 207Deejay, club DJ
  • Entertainers and performers TTOC 208Comedian, clown, magician, street performer
  • Digital content creators TTOC 209Streamer, online video creator, social media influencer, podcaster
  • Ushers, lobby attendants, and ticket takers TTOC 210Ticket collector, theater usher
  • Locker room, coatroom, and dressing room attendants TTOC 211Coat checker, washroom attendant, bathhouse attendant

Hospitality and guest services

  • Baggage porters and bellhops TTOC 301Hotel baggage handler, curbside airport check-in assistant, doorman
  • Concierges TTOC 302Hotel guest service agent, activities concierge
  • Hotel, motel, and resort desk clerks TTOC 303Front desk clerk, registration clerk
  • Maids and housekeeping cleaners TTOC 304Hotel maid, housekeeping staff.

Home services

  • Home maintenance and repair workers TTOC 401Handyman, roofer, window repairer, house painter, flooring installer, piano tuner, furniture restorer, antique repairer
  • Home landscaping and groundskeeping workers TTOC 402Lawn mower, gardener, tree trimmer, weed sprayer
  • Home electricians TTOC 403Electrician
  • Home plumbers TTOC 404Plumber, pipefitter, steamfitter, sprinkler installer
  • Home heating and air conditioning mechanics and installers TTOC 405Air conditioning repairer, heating system installer, chimney sweep
  • Home appliance installers and repairers TTOC 406Washing machine installer, dishwasher repairer
  • Home cleaning service workers TTOC 407House cleaner, pool cleaner, carpet cleaner, window washer
  • Locksmiths TTOC 408Safe installer, key maker
  • Roadside assistance workers TTOC 409Tow truck driver, car battery technician, tire repairer, tire changer, car fuel deliverer

Personal services

  • Personal care and service workers TTOC 501Elderly companion, personal care aide, butler, house sitter, personal valet
  • Private event planners TTOC 502Wedding planner, party planner
  • Private event and portrait photographers TTOC 503Wedding photographer, headshot photographer
  • Private event videographers TTOC 504Wedding videographer
  • Event officiants TTOC 505Wedding officiant, funeral celebrant, clergy, vow renewal officiant
  • Pet and show animal caretakers TTOC 506Pet groomer, pet sitter, pet walker, kennel worker, pet trainer, horse groomer
  • Tutors TTOC 507Reading tutor, math tutor, language tutor
  • Nannies and babysitters TTOC 508Au pair, child sitter at hotels and gyms
  • Visual artists TTOC 509Ice sculptor, caricature sketch artist
  • Floral designers TTOC 510Corsage maker, florist, flower arranger, event florist

Personal appearance and wellness

  • Skincare specialists TTOC 601Facialist, electrologist, spa esthetician
  • Massage therapists TTOC 602Masseuse, deep tissue massage therapist, sports massage therapist
  • Barbers, hairdressers, hairstylists, and cosmetologists TTOC 603Wig stylist, beautician, hair colorist, hair cutter
  • Shampooers TTOC 604Scalp treatment specialist, shampoo assistant
  • Manicurists and pedicurists TTOC 605Nail technician, fingernail sculptor, nail painter
  • Eyebrow and eyelash technicians TTOC 606Eyebrow waxer
  • Makeup artists TTOC 607Wedding makeup artist, party makeup artist
  • Exercise trainers and group fitness instructors TTOC 608Aerobics trainer, yoga instructor, personal trainer
  • Tattoo artists and piercers TTOC 609Tattoo artist, ear piercer, nose piercer
  • Tailors TTOC 610Tailor, seamstress, clothing alterations worker
  • Shoe and leather workers and repairers TTOC 611Cobbler, shoe shiner

Recreation and instruction

  • Golf caddies TTOC 701Golf caddie, golf cart attendant
  • Self-enrichment teachers TTOC 702Knitting instructor, piano teacher, art instructor, dance teacher
  • Recreational and tour pilots TTOC 703Helicopter tour pilot, hot air balloon aeronaut, skydiving pilot
  • Tour guides TTOC 704Museum guide, sightseeing guide
  • Travel guides TTOC 705Cruise director, river expedition guide
  • Sports and recreation instructors TTOC 706Diving instructor, ski instructor, tennis teacher, surfing instructor

Transportation and delivery

  • Parking and valet attendants TTOC 801Parking garage attendant, valet parker
  • Taxi and rideshare drivers and chauffeurs TTOC 802Cab driver, personal driver, platform/app-based rideshare driver
  • Shuttle drivers TTOC 803Airport shuttle driver, hotel shuttle driver, rental car shuttle driver
  • Goods delivery people TTOC 804Pizza delivery driver, grocery delivery driver, floral delivery, bicycle courier, package delivery person, appliance delivery driver, furniture delivery person, app/platform-based delivery person
  • Personal vehicle and equipment cleaners TTOC 805Car wash attendant, auto detailer, boat waxer
  • Private and charter bus drivers TTOC 806Motor coach bus driver, tour bus driver
  • Water taxi operators and charter boat workers TTOC 807Water taxi captain, air boat operator, charter boat deckhand, charter boat steward
  • Rickshaw, pedicab, and carriage drivers TTOC 808Horse drawn carriage driver, bike taxi driver
  • Home movers TTOC 809Furniture mover, packer, piano mover, art mover
  • Gas pump Attendant TTOC 810Gas pumper

New car? Check final assembly

Vehicle label or the NHTSA VIN decoder

The car, minivan, van, SUV, pickup or motorcycle must be new (its original use starts with you), under 14,000 pounds, and have had its final assembly in the United States. The window sticker (Monroney label) lists the final assembly point; so does the plant code in your VIN, which the NHTSA VIN decoder (opens in a new tab) reads for you.

The loan must be taken out after December 31, 2024, secured by the vehicle, and for personal use. Leases, fleet and commercial vehicles, salvage titles and loans from family don't count. Refinancing is fine up to the old balance. You'll enter the VIN on your return; this calculator never asks for it.

What this doesn't include

Federal income tax only, on the 2026 draft form

Estimate, not tax advice. Federal income tax only. Based on the IRS 2026 draft Schedule 1-A and Rev. Proc. 2025-32.

Not modelled:

  • Tax credits (Child Tax Credit, Earned Income Tax Credit and others)
  • Capital-gains and qualified-dividend rates
  • The qualified business income deduction (QBI)
  • Alternative minimum tax (AMT)
  • Self-employed tips and overtime (net-profit limits, self-employment tax)
  • More than one job or occupation with tips (the multiple-employer worksheets)
  • Excluded foreign or Puerto Rico income added back to MAGI (Schedule 1-A lines 2a–2d)
  • The extra standard deduction for blindness
  • State income tax

The 2026 Tax Table isn't published yet: we apply the 2025 table's construction to the 2026 rates, so a result can differ from the final table by a dollar at most. These are income-tax deductions: Social Security and Medicare tax still apply to your tips and overtime.

Questions

8 answers, from Box 12 codes to state tax

Is all my overtime pay tax-free?

No. Only the overtime premium counts: the extra half in time-and-a-half that the Fair Labor Standards Act requires, up to $12,500 ($25,000 married filing jointly). If you earn $20 an hour and work overtime at $30, only the extra $10 an hour is deductible. Pay above 1.5 times your rate, holiday or weekend premiums without 40 hours, and state-only overtime don't count. Your regular pay and the base part of overtime are still taxed as usual.

What is code TT or TP in W-2 Box 12?

Starting with 2026 W-2s, employers report qualified overtime compensation in Box 12 with code TT and qualified tips with code TP. Copy that number into this calculator. If your W-2 doesn't show it, your employer may give you a separate statement, or you can estimate the overtime premium from your pay stubs (overtime hours × hourly rate × 0.5).

Do I need to itemize to claim these deductions?

No. The tips, overtime, car-loan interest and senior deductions go on Schedule 1-A and are subtracted after your adjusted gross income, whether you take the standard deduction or itemize.

Can married filing separately claim no tax on tips or overtime?

No. If you're married you must file a joint return to claim the tips, overtime or senior deduction. The car-loan interest deduction is the exception: it works with any filing status, including married filing separately.

Does the $6,000 senior deduction replace the extra standard deduction for 65+?

No, it comes on top. In 2026 a person 65 or older still gets the extra standard deduction ($2,050 single or head of household, $1,650 married) and can also take up to $6,000 on Schedule 1-A. For 2026 you count as 65 if you were born before January 2, 1962. The $6,000 shrinks by 6% of income over $75,000 ($150,000 joint).

Which cars qualify for the car-loan interest deduction?

A new car, minivan, van, SUV, pickup or motorcycle under 14,000 pounds whose final assembly happened in the United States, bought with a loan taken out after December 31, 2024, mainly for personal use and secured by the vehicle. Leases, used cars and business vehicles don't count. You'll need the VIN on your return; the vehicle label or the NHTSA VIN decoder shows the plant of final assembly.

When do the deductions phase out, and how fast?

Tips and overtime lose $100 for every full $1,000 of income over $150,000 ($300,000 joint); a partial thousand doesn't count. Car-loan interest loses $200 for every $1,000 or part of $1,000 over $100,000 ($200,000 joint), so even $1 over takes $200. The senior deduction loses 6% of income over $75,000 ($150,000 joint).

Do these lower Social Security and Medicare tax or my state tax?

They are federal income-tax deductions only. Social Security and Medicare tax still apply to your tips and overtime. Whether your state follows these deductions depends on the state.

Sources

Statutes, the IRS 2026 draft form, Rev. Proc. 2025-32

  1. 26 USC 224

    Tips: $25,000 cap per return; −$100 per $1,000 over $150,000 / $300,000 MAGI; listed occupations; no specified service business; SSN; joint return if married

    US Code (opens in a new tab) · Checked

    Verified (primary)

  2. 26 USC 225

    Overtime: $12,500 / $25,000 joint cap; same phase-out; only FLSA pay above the regular rate; SSN; joint return if married

    US Code (opens in a new tab) · Checked

    Verified (primary)

  3. 26 USC 163(h)(4)

    Car-loan interest: $10,000 cap; −$200 per $1,000 or portion over $100,000 / $200,000; new vehicle, final assembly in the US, loan after Dec 31, 2024, first lien, personal use

    US Code (opens in a new tab) · Checked

    Verified (primary)

  4. 26 USC 151(d)(5)(C)

    Senior: $6,000 per person 65+; −6% of MAGI over $75,000 / $150,000; SSN; joint return if married

    US Code (opens in a new tab) · Checked

    Verified (primary)

  5. 2026 Schedule 1-A (draft, Sep 4, 2026)

    2026 line logic: W-2 box 12 TP and TT, round down (lines 13, 25), round up (line 34), born before Jan 2, 1962 (lines 42a/b), total on line 44

    IRS (opens in a new tab) · Checked

    IRS draft

  6. 2025 Schedule 1-A

    Same logic on the final 2025 form

    IRS (opens in a new tab) · Checked

    Verified (primary)

  7. 2025 Form 1040 instructions, Schedule 1-A section

    Car-loan thresholds by filing status (MFS allowed); what counts as overtime premium; the age-65 day-before rule

    IRS (opens in a new tab) · Checked

    Verified (primary)

  8. Fact sheet FS-2025-03

    Plain-language summary; final assembly on the vehicle label or the NHTSA VIN decoder

    IRS (opens in a new tab) · Checked

    Verified (primary)

  9. Fact sheet FS-2026-04

    Tips cap is $25,000 per return for single filers and married couples filing jointly

    IRS (opens in a new tab) · Checked

    Verified (primary)

  10. Occupations that customarily and regularly received tips

    The 71 tipped occupations (Treasury Tipped Occupation Codes 101–810)

    IRS (opens in a new tab) · Checked

    Verified (primary)

  11. Rev. Proc. 2025-32 §4.01, §4.14

    2026 tax brackets, standard deduction and 65+ amounts

    IRS (opens in a new tab) · Checked

    Verified (primary)

  12. vPIC VIN decoder

    VIN decoder: plant of manufacture

    NHTSA (opens in a new tab) · Checked

    Verified (primary)

  13. Apr 15, 2026

    Over 53 million filers claimed a new deduction in the 2026 filing season

    AP via Anchorage Daily News (opens in a new tab) · Checked

    Verified (secondary)

Last updated . Built by plusbeauxjours; not affiliated with the IRS.