Did 'Big Beautiful Bill' include no tax on overtime? What to know about Trump's 'promises kept'
The bill passed the House of Representatives the day before after an intense debate in the Senate, where some members of his own party voted against it with complaints on the bill's price tag and the cuts to Medicaid.
But Trump touted his "promises made, promises kept," as he signed the legislation on the White House's South Lawn on the 249th Anniversary of the Declaration of Independence.
Of those promises, the bill includes tax breaks on tips and overtime. Here is what to know:
More: Will Trump's big tax bill help or hurt you? Why it could depend on your income
Does the bill include no tax on overtime?
Yes, the bill includes a tax break for overtime and tips.
Workers will be able to deduct up to $25,000 in tips (so long as they "customarily and regularly receive them, like servers). Workers can also deduct $12,500 in overtime pay, but the temporary law ends Dec. 31, 2028, shortly before Trump leaves office.
Individuals earning more than $150,000 will be eligible, but for reduced deductions.
When will the tips, overtime deduction go into effect?
This year. The deductions are in effect for taxable years starting Jan. 1, 2025.
What no tax on tips or overtime mean for workers
The deduction method means workers won't see an immediate boost in take-home pay, but the deduction could mean better news after filing taxes.
The tax break sounds universal, but it's slanted toward middle- and higher-income earners — workers who owe enough federal income tax for the deductions to make a real difference. Here are some examples of how the tax breaks could shake out:
But some tipped and overtime workers won't see much benefit, if any.
The federal tax system is progressive: the more you make, the more you owe. That means deductions like these give the biggest benefit to those with significant taxable income. Plus, state income taxes still apply.
Contributing: Zac Anderson, Bailey Schulz, Jim Sergent, Janet Loehrke, USA TODAY
Kinsey Crowley is the Trump Connect reporter for the USA TODAY Network. Reach her at kcrowley@gannett.com. Follow her on X and TikTok @kinseycrowley or Bluesky at @kinseycrowley.bsky.social.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
27 minutes ago
- Yahoo
South Korea trade envoy: may be able to strike framework deal with US by Aug 1 deadline
SEOUL (Reuters) -South Korea's top trade envoy said on Monday it may be possible to strike an "in-principle" trade deal with the United States by an August 1 deadline, but time is short to work out a detailed package seeking exemption from punishing U.S. tariffs, media reports said. Minister for Trade Yeo Han-koo, who held high-level talks with U.S. officials last week, said South Korea may have to make some strategic decisions over its agriculture market as part of trade negotiations with the United States, the Yonhap News Agency said. "I believe it's possible to reach an agreement in principle in the U.S. tariff negotiations, and then take some time to negotiate further," the Newsis news agency quoted Yeo as telling local media reporters. "Twenty days are not enough to come up with a perfect treaty that contains every detail." There was "considerable progress" in the discussion with U.S. officials over cooperation in key industrial sectors as part of the trade talks, Yeo was cited as saying, but Washington needs to cut industry-specific tariffs on autos and steel, calling them "unfair" and severely undermining bilateral cooperation. South Korea is in a race to reach a compromise trade pact in the hope of avoiding a 25% tariff slapped on its exports announced by U.S. President Donald Trump that is set to kick in on August 1, after a late start to negotiations with a new president voted in last month. President Lee Jae-myung took office on June 4 following the ouster of his predecessor Yoon Suk Yeol over a failed martial law attempt. The six months of political turmoil forced Seoul to initially focus on technical discussions over Trump's demands.
Yahoo
33 minutes ago
- Yahoo
It's been 1 year since Trump was shot in Butler, Pa. Did the assassination attempt 'change' him?
Exactly a year ago today, on July 13, 2024, once and future President Trump was bundled offstage in Butler, Pa., with blood staining his cheek and his fist raised in defiance after the bullet of a would-be assassin grazed his ear, just millimeters from his brain. 'I didn't know exactly what was going on,' the president recalled last week in an interview with his daughter-in-law, Lara Trump. 'I got whacked. There's no question about that. And fortunately, I got down quickly.' A lot has changed since Trump managed to get back up that day. Tesla CEO Elon Musk endorsed him within the hour, then donated more than $250 million to a super-PAC supporting his candidacy. A week later, Trump's Democratic opponent, Joe Biden, ended his reelection campaign, becoming the only president in U.S. history to surrender his party's nomination after winning its primary. Four months later, Trump defeated Biden's replacement, Vice President Kamala Harris, by about 2 million votes. Now, in the spot where an official portrait of former President Barack Obama once hung, every visitor to the Grand Foyer of the White House passes a painting of Trump rising to his feet in Butler and imploring the crowd to 'fight, fight, fight.' A similar image adorned Trump's recent limited-edition sneaker drop ($299), and those three words double as the name of one of his new fragrances ($199). 'It was a scary time, and it changed everything for us,' White House chief of staff Susie Wiles recently told the New York Post. But has Trump himself changed since the shooting? And if so, how? In the aftermath of last year's assassination attempt, the president and his allies repeatedly promised a new Trump. 'Getting shot in the face changes a man,' conservative pundit Tucker Carlson insisted at the time. 'He's changed and we're all freaking out,' a source close to Trump told Vanity Fair. 'He was like, 'Holy shit, that was close.' He feels blessed.' At the time, GOP officials described him as 'emotional,' 'serene,' 'existential' — even 'spiritual.' With the Republican National Convention just days away, Trump 'put the word out that he [didn't] want any talk of revenge or retaliation in speeches or anywhere else,' a Republican close to the campaign told VF. Trump then went on to claim, in an interview with the New York Post, that 'I had all prepared an extremely tough speech, really good, all about the corrupt, horrible [Biden] administration. But I threw it away. 'I want to try to unite our country,' Trump continued. 'But I don't know if that's possible. People are very divided.' Yet when he took the stage in Milwaukee to accept his party's nomination, Trump couldn't help but stray from his new script to complain about 'crazy Nancy Pelosi ... destroying our country' and Democrats 'cheating on elections.' Finally — about halfway through the nearly 100-minute speech, after lengthy digressions on the border 'invasion' and Hungary's Viktor Orbán — Trump attacked his opponent by name. 'If you took the 10 worst presidents in the history of the United States and added them up, they will not have done the damage that Biden has done,' he said. 'I will only use the name once... Biden.' Trump's convention speech was an early sign that his tone, at least, wouldn't be changing. And true to form, the president has continued to blame Biden and demonize Democrats well into his second term. He has also continued to commemorate national holidays by attacking his perceived enemies on Truth Social. 'Happy Memorial Day to all, including the scum that spent the last four years trying to destroy our country through warped radical left minds,' Trump wrote in May. 'Hopefully the United States Supreme Court, and other good and compassionate judges throughout the land, will save us from the decisions of the monsters who want our country to go to hell,' he added. Revenge and retaliation still seem to be on the table as well. To pick just one example, the New York Times reported last week that the Secret Service had former FBI Director James Comey followed by law enforcement officers in unmarked cars and street clothes after Trump recently accused Comey of threatening his life with an Instagram photo of seashells. Finally, and most consequentially, Trump's actual politics don't seem to have shifted either. Before Butler, for instance, Trump confirmed in an interview with Time magazine that he was planning 'a massive deportation of people' using 'local law enforcement' and the National Guard — and 'if they weren't able to,' he added, 'then I'd use [other parts of] the military.' His inspiration, he said at the time, was the 'Eisenhower model' — a reference to President Dwight D. Eisenhower's 1954 campaign, known by the ethnic slur 'Operation Wetback,' to round up and expel Mexican immigrants in what amounted to a nationwide 'show me your papers' rule. Trump has since done just that in Los Angeles — even though far more Americans say they disapprove (50%) than approve (36%) of his actions there, according to the latest Yahoo/YouGov poll. One of the only major policy areas where Trump has changed his mind since the shooting is cryptocurrency. 'I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,' he said in a series of social media posts in 2019. 'Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.' Bitcoin 'just seems like a scam,' Trump added in 2021; cryptocurrencies are a 'disaster waiting to happen.' 'I think they should regulate them very, very high,' he concluded. But the fact that Trump has done the opposite since returning to office probably has less to do with last year's brush with mortality than with his family's new $1 billion crypto empire. Last summer, Vanity Fair asked whether Trump's 'chastening' was a 'short-term response to a near-death experience' or 'smart politics?' 'Would a reformed Trump replace his extreme policies with a moderate agenda?' the outlet continued. 'And would Trump, who has spoken ominously of seeking vengeance and retribution if elected, suddenly temper those dark impulses?' One year later, it seems the answer is no. Yet there is one thing about Trump that does seem to have changed, according to those around him: He now feels empowered to follow his own instincts in a way he didn't during his first term as president. In a National Review interview published to coincide with the release of her new book, Butler: The Untold Story of the Near Assassination of Donald Trump and the Fight for America's Heartland, Washington Examiner reporter Salena Zito — who is often described as a 'Trump whisperer' of sorts — recalls how the president started attributing his survival to the 'hand of God' in their post-Butler conversations. 'He has this recognition that, in that moment and from that moment on, God was watching him, and that there was a reason that he didn't die,' Zito says. '[He's] very much the same person, but [he's changed] even in the way that he handles the urgency of what he wants to accomplish. ... He is on a mission to do as much as he can because he was saved in that moment.' If true, nothing demonstrates this dynamic like Trump's second-term tariff strategy. Import taxes aren't a new obsession for Trump. 'I believe very strongly in tariffs,' he told journalist Diane Sawyer in 1988, nearly 30 years before his first presidential run. 'America is being ripped off. We're a debtor nation, and we have to tax, we have to tariff, we have to protect this country.' Trump has long insisted (contra nearly all mainstream economists) that universal tariffs will level the proverbial playing field by incentivizing companies to retain American workers and ramp up U.S. manufacturing — all while funneling 'trillions' of dollars in new revenue to the federal government. But after fitfully pursuing these ideas during his first term — his advisers mostly objected — the president is now putting his pet theories fully into practice, launching trade wars with allies and adversaries alike. Enabled by the loyalists he's surrounded himself with — and liberated by the fact that he isn't allowed to run again in 2028 — Trump has taken a similar you-only-live-once approach on deportation, Iran, the courts and the federal government itself. Ultimately, the shooting has 'made [Trump] more aggressive,' Republican Rep. Anna Paulina Luna of Florida told Time magazine last week. 'It actually did define him in the presidency.'
Yahoo
34 minutes ago
- Yahoo
President Donald Trump's border czar cast blame for 'collateral arrests' of U.S. citizens and legal immigrants on former President Joe Biden.
Tom Homan has dismissed concerns that President Donald Trump's anti-immigration crusade continues to ensnare those who are not in the country illegally. 'You just said that there are 'collateral arrests' and that is sparking fear in communities where people are ... scared to go out,' CNN host Dana Bash said on State of the Union Sunday. 'Do you have compassion for those people who are seeing what's going on, hearing you speak, seeing what's happening in their neighborhoods?' Homan deflected, saying that 'collateral arrests' of U.S. citizens and legal immigrants could be avoided if Immigration and Customs Enforcement (ICE) were allowed to operate in jails, which is forbidden in 'sanctuary cities' that do not cooperate with federal immigration authorities.
