Edmars CPA

Taxpayers are starting to receive their 2025 tax documents, such as W-2s, Forms 1099 or other income documents. People who sold or disposed of digital assets using a broker might receive a new Form 1099-DA from those brokers.

Examples of digital assets include
• Convertible virtual currencies and cryptocurrencies such as Bitcoin
• Stable coins
• Nonfungible tokens

Brokers must send taxpayers a copy of the same information they report to the IRS on Form 1099-DA by Feb. 17,2026. These are different from some other tax statements taxpayers may receive. Most of these statements will not include the basis for DA transactions in 2025 and taxpayers will have to calculate basis to determine their gain or loss.
Every taxpayer must report any related income, gains, or losses, whether they receive a Form 1099-DA or not.

The One, Big, Beautiful Bill has a significant effect on federal taxes, credits and deductions. Millions of taxpayers reported earning tips and overtime on their tax returns, many of them are veterans and people working in lower wage jobs. This relief will impact most of these taxpayers and they can start taking advantage of the deduction this filing season.

No tax on tips --

Employees and self-employed individuals may deduct qualified tips received in certain qualified occupations, such as wait staff, bartenders, salon workers, personal trainers, gig economy workers, and many more who customarily and regularly receive tips might qualify.

Even better, tips earned on or before December 31, 2024, and are reported on a Form W-2, Form 1099, or other statement furnished to the individual or reported directly by the individual on Form 4137 can be deducted.

• “Qualified tips” are voluntary cash or charged tips received from customers or through tip sharing
• Maximum annual deduction is $25,000; for self-employed, deduction may not exceed individual’s net income, without regard to this deduction, from the trade or business in which the tips were earned
• The deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers)

No Tax on Overtime

Individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay, generally, the “half” portion of “time-and-a-half” compensation, that’s required by the Fair Labor Standards Act and reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.
• Maximum annual deduction is $12,500 ($25,000 for joint filers)
• Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers)
• The deduction is available for both itemizing and non-itemizing taxpayers

The Senate on Tuesday passed a bill that would eliminate federal taxes on tips, advancing with the help of Democrats a top campaign promise of President Trump.

Sen. Jacky Rosen (D-Nev.) brought the bill to the floor with the expectation that it would be blocked, but Sen. Ted Cruz (R-Texas) declined to. It passed via unanimous consent (UC).

“I just want to say: This is great news for Nevada,” Rosen said after the bill was advanced, lauding the work of the millions of hospitality and service workers in her home state, who she says are being “squeezed by rising costs.”

“This bill is not the be-all, end-all, but it’s going to offer immediate financial relief while the Senate continues to work to lower costs and find other avenues of relief for hardworking families,” she said before yielding the floor.

Trump unveiled the idea last year during a campaign stop in Nevada, which is home to scores of tipped workers.

Cruz noted in his floor remarks in support of Rosen’s UC request that the Nevada senators — Rosen and Sen. Catherine Cortez Masto (D-Nev.) — relayed that roughly 25 percent of Nevada workers rely on tips. Rosen said that the Silver State has more tipped workers per capita than any other.

“Nevadans, our families, are being squeezed, and we need real relief,” Rosen said in her floor remarks. “For some, many service and hospitality workers, tips aren’t extra, it’s part of their income that they use to make ends meet.”

The Texas Republican spoke up in support of the bill immediately after, explaining the genesis of the push by Trump during the campaign and hailing it as a moment of “political genius” by the president to back the idea.

The bill, the No Tax on Tips Act, will now head to the House, where the provision is expected to be passed one way or another — be it via the stand-alone measure or Trump’s “big, beautiful bill” that will extend tax cuts.

“Here’s the good news: With what we just saw now, the certainty that we will see no tax on tips become the law of the land, I think, is very close to 100 percent,” Cruz said. “One way or another, no tax on tips is going to become law.”

The legislation would establish a new tax deduction of up to $25,000 for tips, among other things.

- The Hill, Al Weaver

Payment plans can help you cover unpaid taxes with the IRS.

Learn more at https://ow.ly/AraQ50VIPLg.