Can I claim all four deductions?

Yes — if you qualify for each one independently. Overtime and tips require W-2 employment. The car loan deduction requires a qualifying vehicle assembled in the U.S. The senior deduction requires age 65+.

Does this work for self-employed or 1099 contractors?

No. The overtime and tips deductions only apply to W-2 employees. Self-employed income does not qualify.

Is FICA (Social Security and Medicare) included?

No. FICA taxes still apply to all wages, including overtime and tips. These deductions only reduce federal income tax.

← Overtime Calculator

Texas Overtime Tax Deduction Calculator

Hourly workers in Texas.

The short answer: At the scenario numbers pre-loaded below, the OBBBA deduction is $3,120, worth about $374 in federal income tax at a 12% marginal rate ($14 per biweekly paycheck). Change any input and every figure updates live.

Filing Status

Hourly Rate

Regular rate (not OT rate)

Annual Overtime Hours

Hours worked beyond 40/week

Annual Income (MAGI)

Modified Adjusted Gross Income

Overtime Premium Deduction

$3,120

Est. Federal Tax Savings (12% bracket)$374

✅ You qualify for the full deduction

See all your OBBBA deductions →

⚠️ This calculator provides estimates for informational and educational purposes only. It is not tax advice. Results are based on the One Big Beautiful Bill Act (OBBBA) and IRS Schedule 1-A. Consult a qualified tax professional for your specific situation.

When Texas Hours Go Past 40

Texas follows federal overtime rules — no state OT law beyond FLSA, so 1.5× past 40/week is the whole picture.

• Texas has no state daily-overtime rule: OT is owed after 40 hours/week, per the FLSA
• Texas minimum wage tracks the federal $7.25 — most OT-heavy industries (energy, logistics, construction) pay well above it
• Houston/PermianBasin energy schedules and DFW logistics hubs generate heavy OT weeks

Worked Example

A single Texas oilfield-services tech at $24/hour with 260 OT hours — the exact numbers are editable.

• Premium portion: $24 ÷ 2 = $12.00/hour on OT hours
• Deduction: $3,120 (watch the cap and MAGI phase-out as you raise the inputs)
• Federal income tax savings: $374 at the 12% marginal rate

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Frequently Asked Questions

Does Texas tax overtime differently under the OBBBA?

The OBBBA overtime premium deduction is federal — it applies to Texas W-2 OT the same as anywhere. Texas has no state income tax, so the federal deduction is the whole story.

Texas has no state income tax — does the deduction still matter?

Yes — it reduces federal income tax. There's simply no state return to file on top.

Does the overtime deduction change my withholding during the year?

You can adjust your W-4 so the savings show up in each paycheck instead of waiting for a refund — the withholding adjuster on this site walks through it.