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.

← W-4 Withholding Adjuster

Bonus & Overtime Withholding Calculator (OBBBA)

Enter your full-year picture below. The estimate shows the annual and per-paycheck gap between withholding and the OBBBA-adjusted tax — no signup.

The short answer: Priya's partner Alex — at the scenario numbers pre-loaded below, the OBBBA deduction is $4,950, worth about $1,089 in federal income tax at a 22% marginal rate ($42 per biweekly paycheck). Exact figures update live as you change the inputs.

Filing StatusAnnual Income (MAGI)All wages + tips, before deductionsHourly RateRegular rateAnnual Overtime HoursAnnual Tip Income0 if noneVehicle Loan Interest0 if noneYour Age

Federal Income Tax Withheld This Year (paystubs YTD)Your payroll is likely withholding as if none of the OBBBA deductions exist

Total OBBBA above-the-line deductions: $4,950

Extra tax you are on track to over-withhold: $1,089

≈ $42 per biweekly paycheck

File a revised W-4 (Step 4a "other income" negative adjustment or dependents/credits line) to bring this money home in each paycheck instead of waiting for a refund.

⚠️ 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.

Withholding vs. What You Actually Owe

Supplemental withholding is a blunt flat 22% — too much for a 12%-bracket worker, too little at 24%. The OT deduction shifts the reconciliation further: overtime premium comes off the top line, so the flat-rate over-collection grows. Bonus deferral into January (a classic move) now also buys time to size the W-4 against the full OBBBA picture.

The full rules, caps and phase-outs for every deduction are in one table on the OBBBA rules page.

Worked Example

Alex earns a $10,000 bonus withheld at the flat 22% supplemental rate on top of 300 OT hours.

• Deductible amount: $4,950
• Federal income tax savings: $1,089 (at the 22% marginal rate)
• Per biweekly paycheck: $42

Adjust once on your W-4 and that gap shows up in your paychecks instead of waiting for refund season.

Keep Reading

Frequently Asked Questions

Is my bonus withheld at 22% — and does the OT deduction change that?

Supplemental pay like bonuses is typically withheld at a flat 22%. The OBBBA overtime deduction does not change paycheck withholding rates, but it lowers your actual tax, which means the flat withholding over-collects — recoverable via W-4 adjustment or refund.

Does adjusting my W-4 change how much tax I owe?

No. Withholding only changes when you pay — per paycheck versus at refund time. Your actual tax is set by the OBBBA deductions themselves, which this calculator estimates.