IRS updates Schedule 1-A for tips, overtime, car loans, senior deductions
March 07, 2026
The IRS published Schedule 1-A (Form 1040), Additional Deductions, along with updated instructions for Form 1040, U.S. Individual Income Tax Return, that explain how taxpayers can claim the new deductions for tips, overtime, and car loan interest, and the enhanced deduction for seniors.
Taxpayers can claim a deduction of up to $25,000 for tips, provided they report their tips and file jointly if married. Overtime compensation deductions can reach $12,500, with similar joint filing requirements.
Additionally, taxpayers can deduct qualified passenger vehicle loan interest whether they claim the standard deduction or itemize. Senior citizens can claim an enhanced deduction of up to $6,000, or $12,000 for married couples, with specific income thresholds. Learn more.
