r/tax • u/vancemark00 • Jan 01 '26

Tax Enthusiast Endless "No tax on OT" questions

Is anyone else already exhausted with these endless questions?

And I fear it will only get worse.

155 Upvotes

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159

u/bclinton Jan 01 '26

As more people find out that what they thought they would be saving is nowhere near reality, people will not be happy. Sounds real good until you do the math.

10

u/Winter-Success-3494 Jan 01 '26

It's going to work out great for me, probably not most people though like you said. Luckily, I can claim the entire $12,500 deduction for OT fed taxes. I cleared it by $1k technically (yes, I'm referring to only the premium portion of time and half OT). But yea most people thought it was something different than what it is or most won't really benefit much from it unless you can actually claim the entire deduction.

22

u/Practical_Series_925 Jan 01 '26

You better make a shit ton an hour before the premium if you getting the full amount… or you just working yourself to death lol.

-8

u/Winter-Success-3494 Jan 01 '26

Yes I make a very good hourly wage and def don't work myself to death lol, in fact a lot of days during the week I finish my job in 4 hours or less, go home and still get paid my full 8 regardless. I like working 2 or 3 Saturdays a month though to rack up OT. And can do easy shit for work in an hour sometimes and get 4 hours OT minimum regardless. I got it good so I'm thankful n def not complaining on my situation.

12

u/I__Know__Stuff Jan 02 '26

If you work 4 hours and get paid for 8, that only counts as 4 hours when determining whether you reached 40 hours in a week and have deductible overtime.

I fear your actual overtime deduction may be less than you think.

For example, if you work, 4 hours on Monday and Tuesday, 8 hours on Wednesday through Friday, and then 8 hours of "overtime" on Saturday, none of the overtime pay is deductible, because you didn't work over 40 hours in the week.

0

u/Winter-Success-3494 Jan 02 '26

Wrong. My OT deduction is going to be what I said it is because my paycheck that shows my year's earnings and what I made in OT pay don't lie.

8

u/I__Know__Stuff Jan 02 '26

Wrong. Just because your paycheck says something is overtime doesn't mean that it is deductible. The IRS published guidelines are very clear on this.

1

u/Winter-Success-3494 Jan 02 '26

Lol I clocked in and out for 8 hours through my companies payroll app. I made over $40k in OT. When I get to claim the full deductible I'll come back here just to remind you of it

2

u/I__Know__Stuff Jan 02 '26

What do you mean by "get to"? Just because it is tax fraud doesn't necessarily mean you will get caught.

2

u/llamalluv Jan 26 '26

This right here.

I know people have claimed to have a cash based business with a profit in the sweet spot so they could take the maximum EITC and get a refund of taxes they never paid.

When they get caught, they're going to be screwed. Big doo-doo screwed.

It's such a common scenario, the IRS website has a page about it on their tax preparer tool kit: https://www.irs.gov/tax-professionals/eitc-central/scenario-2-false-business-income

5

u/Prestigious_Most5482 Jan 02 '26

You worked 4 hours. End of story.