The Schedule 1-A does not differ from the draft version issued last year, but instructions for Form 1040 provide details and examples on the four temporary deductions.

The IRS won’t require employers to separately report tips and overtime in 2025, which may be confusing for employees. IRS guidance can help figure the deductions.

A new tax deduction for tip income is available for 2025 federal income tax returns. Learn the new form to file, who qualifies, and income limits.