If you earn tips or work overtime, there’s good news on the tax front—and it could mean more money in your pocket.

What Changed?

A new tax law now exempts:

• Up to $25,000 of tip income

• Up to $12,500 of overtime pay

That means a portion of your income from tips and overtime is no longer subject to federal income tax.

But there’s a catch: your employer is still required to withhold taxes as if those wages are taxable. So, while you’ll get that money back as a tax credit at the end of the year, you might feel like you’re paying too much right now.

Two Ways to Benefit

1. Get a Bigger Refund at Tax TimeKeep everything as-is and, when we file your return, we’ll claim the tax credit. This corrects the over-withholding and you’ll receive it back in your refund.

2. See More Money in Your Paycheck NowPrefer not to wait until tax season? Work with your HR or payroll department to adjust your withholding. By lowering how much tax is taken out each pay period, your take-home pay increases immediately. No waiting, no extra steps at year-end.

Which Option Is Right for You?

If you like a big refund, option one is perfect. If you’d rather have a little more in your paycheck every week, option two makes sense. Either way, this is your money—and this tax law makes sure you keep more of it.

We’re Here to Help

Need help adjusting your withholdings or understanding how this credit works for your specific situation? Our team at The Greenberg Group specializes in navigating tax law changes like this one. Contact us today and let’s make sure you’re getting every dollar you deserve.