The 2026 “Tax-Free” Overtime: How to Use the OBBBA Deductions

  • Target AdSense CPC: $38+ (CPA & Payroll Services)
  • The Mechanism: The One Big Beautiful Bill Act (OBBBA) has introduced a revolutionary deduction for overtime pay (up to $25,000 for joint filers) and tip income.
  • Strategic Planning: For Q2 2026, LLCs must adjust their payroll systems to separate “Standard” vs. “Tax-Exempt Overtime” to maximize employee retention without increasing the tax burden.
  • The Shark Insight: “In a labor shortage, tax-free overtime is your secret weapon. If your LLC’s MAGI is under $300k, you can effectively give your team a raise that the IRS pays for. If your payroll software isn’t updated for the OBBBA exemptions yet, you’re throwing away a 20% retention advantage.”

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