Recently, the American Institute of Certified Public Accountants (AICPA) asked the IRS to clarify reporting and substantiation requirements for deducting qualified tips and overtime pay. These deductions were made available by the One Big Beautiful Bill Act beginning in 2025. But the IRS has stated it won’t be updating Forms W-2 or 1099 for the 2025 tax year. As the AICPA explained, this makes it hard for taxpayers to meet required information-reporting standards for the deductions. It suggests that the IRS implement a safe harbor so that businesses, workers and tax professionals can use alternative reporting methods and documentation for 2025.
