The Oklahoma Bar Journal May 2026

they affect taxpayers who do not normally think of themselves as receiving “tax planning.” Effective from 2025 through 2028, eligible taxpayers may deduct qualified tips up to $25,000 annually, subject to phaseouts above $150,000 of modified adjusted gross income for single taxpayers and $300,000 for joint filers. The deduction is available for both itemizers and nonitemizers, but it applies only to tips received in occupations the IRS identified as customar ily and regularly receiving tips on or before Dec. 31, 2024, and certain service-trade limitations apply. The same law also created a deduction for qualified overtime compensation, generally the por tion above the regular rate of pay, up to $12,500 annually or $25,000 on a joint return, again with the same phaseout structure. Small businesses that employ tipped workers or pay overtime also face operational changes, even when the tax deductions are claimed by the worker. The IRS

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

MAY 2026 | 15

THE OKLAHOMA BAR JOURNAL