Financial ACES

Tax Filing Tips:

With the new tax rules in play, a lot of tipped employees are asking the same question:

“Where do I actually report my tips and overtime on my tax return?”

Let’s keep this simple.

Filing the Paper Forms
If you’re doing your taxes the old-school way on paper... first of all, respect the retro commitment.
You’ll want to complete Form 1040, Schedule 1-A (Additional Deductions):
Part 2 – Tips
Part 3 – Overtime
Once you’ve added everything up, your total deduction gets carried over to Line 13b on your main Form 1040. That’s the number that reduces your taxable income.

Using Tax Software (TurboTax, H&R Block, etc.)
If you’re using tax prep software, the process is much easier.
After you enter your main income (your W-2), the software will automatically guide you through a section labeled “Additional Deductions.” That’s where you’ll input:
Your eligible tipped income
Any qualifying overtime income
The software does the math and places the deduction in the correct spot on your return.

One Important Reminder
Just because the software asks the questions doesn’t mean it always explains the strategy. Entering these numbers correctly can mean the difference between a small refund and a very large one, especially for casino employees.

Questions? Let’s Talk.
If you’re not sure what qualifies, how much you should enter, or how this impacts your overall tax plan, don’t guess.
Reach out with questions before you file.
I help tipped casino employees understand their numbers, avoid mistakes, and keep more of your own.

financialaces.com

Just How Much Tax Money Should I Expect To Get Back?

Episode 3: Lisa – A single, 66-year-old Slot Attendant

Lisa has worked on the slot floor for decades. She earns solid money, most of it with a healthy portion of tips, and she’s now over 65.

For 2025, the One Big Beautiful Bill Act (OBBBA) gives her two major advantages:
The new “No Tax on Tips” deduction, and
Extra deductions available to seniors.

Let’s walk through what her tax return could look like.

Lisa’s Situation
Filing status: Single
Total income: $100,000
Tipped income: At least $25,000
Age: 66 (qualifies for senior benefits)

Step 1 – Start With Gross Income
Lisa’s W-2 shows:
$100,000 total income

Step 2 – Standard Deduction With the Senior Boost
For 2025:
Standard deduction for Single = $15,750
Additional deduction for age 65+ = $2,000
Total standard deduction = $17,750
$100,000 − $17,750
= $82,250

Step 3 – Apply “No Tax on Tips”
OBBBA allows tipped workers to deduct up to $25,000 of tip income.
$82,250 − $25,000
= $57,250

Step 4 – New Senior Income Deduction
There’s also a new senior deduction capped at $6,000.
But it phases out for single filers once income exceeds $75,000.
Lisa’s income is $25,000 over the threshold.

Phase-out formula:
6% × $25,000 = $1500
$6,000 − $1,500 (rounded phase-out on $25k over limit)
= $4,500 allowed deduction

$57,250 − $4,500
= $52,750 taxable income

Step 5 – Calculate the Tax
2025 Single tax brackets:
10%: $0 – $11,925
12%: $11,925 – $48,475
22%: $48,475 – $103,350

The math:
10% of $11,925 → $1,192.50
12% of $36,550 → $4,386.00
22% of $4,275 → $940.50
👉 Total Federal Tax = $6,519

Step 6 – What Lisa Is Likely to Get Back
Most casinos withhold about 12% federal tax from paychecks.
12% of $100,000 = $12,000 withheld
Actual tax owed = $6,519
Expected Refund:
$5,481

That’s significant money coming back, largely thanks to:
the $25,000 tip deduction, and the extra benefits for being over 65.

Why This Is a Game Changer for Seniors
In prior years Lisa would have paid tax on a larger piece of her $100,000 of income.

Now she benefits from:
A larger standard deduction
A brand-new senior deduction
No tax on a big chunk of her tips

Her taxable income dropped from $100,000 → $52,750.
That’s almost cut in half.

Ways Lisa Could Reduce Taxes Even More
Even with these new rules, Lisa still has options:
HSA contributions (Up to $4,300 if on a high-deductible health plan)
Traditional IRA contributions (Up to $8,000 for individuals over 50)
401(k) contributions
Pre-tax health or dental premiums

Each of those moves would lower taxable income even further. Just the HSA + IRA contributions could add another $1900 from her taxes owed, pushing her refund to more than $7,000!

Final Thoughts
For older casino employees, 2025 may be the most tax-friendly year we’ve ever seen. The combination of senior deductions and “No Tax on Tips” finally recognizes the reality of how tipped workers earn their living.

If you’re in Lisa’s shoes and want to see your own personalized numbers, before you file, I’d love to help you plan instead of just hoping for the best.