Yes.
- Tips: Up to $25,000 deductible
- Overtime: up to $12,500 (single) / $25,000 (joint).
Both phase out at MAGI $150,000 (single) or $300,000 (joint) and apply for 2025–2028.
Example: Alex earns $40,000 salary and $20,000 in tips. Alex can deduct up to $20,000 in tips (within $25,000 cap). Standard deduction: $15,750 Resulting in a significant reduction in taxable income.