No tax on overtime — what does it really mean for you?

In this video, Ara Oghoorian, CFP®, provides an important update on the "No Tax on Overtime" provision included in the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. Since the IRS has now released an official Fact Sheet with further guidance, this video addresses the most frequently asked questions we received following our previous video on the new legislation.
Ara breaks down what the new federal deduction for overtime pay really means, what qualifies, how much you can deduct, whether you need to itemize, and how this may affect both employees and employers.

0:00 Intro
0:51 Is all overtime pay now completely tax-free?
1:27 What is the "new tax bill" and when did it go into effect?
1:39 How much overtime pay can I deduct?
2:01 Does this deduction apply to all overtime I earn?
2:23 When does the deduction show up on my paycheck?
2:47 Do I need to itemize my deductions to claim this?
3:00 Are there income limits for this deduction?
3:30 What does this mean for employers?
3:40 Will this deduction affect my Social Security and Medicare taxes?
3:55 How long will this "no tax on overtime" provision be in effect?

IRS Fact Sheet: https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors

Passed: One Big Beautiful Tax Bill Explained In Detail
https://youtu.be/CRFfmLX9t3Q

#overtimetaxes #bigbeautifulbill

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Financial Advisor in Los Angeles, CA
CPA in Los Angeles, CA

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DISCLAIMER: This video is for informational purposes only and should not be construed as tax, financial, or legal advice. Every person’s situation is different, and you should consult with your own financial and tax advisor for advice specific to your situation. Comments are not reviewed.