Overtime Deductions, Client Confusion & Smarter Tax Prep

Overtime deductions became one of the most misunderstood tax topics coming out of the last election cycle—and that confusion is heading straight into tax season. In this episode, Lee Reams II and Lee Reams Sr. break down what actually qualifies as deductible overtime , why state overtime rules don’t automatically apply for federal tax purposes , and why the 2025 tax season will be far more labor-intensive for firms than most people expect . This isn’t about complicated tax law. It’s about time, communication, and preparation . What we cover: • Why not all overtime qualifies for the federal deduction • State overtime rules vs. FLSA rules—and why the difference matters • Why weekly overtime analysis creates major prep bottlenecks • A real-world example where “earned OT” still results in no deduction • The hidden trap with time-and-a-half vs. double-time pay • Why 2025 puts the burden on firms—not employers • How structured worksheets and standardized intake save hours per return • The curveball many firms miss: tipped occupations • The advisory opportunity hiding inside a compliance headache The big takeaway: Firms that educate clients early, collect cleaner data, and use smarter systems will avoid chaos—and have better advisory conversations with better outcomes. This episode is a must-listen for tax and accounting professionals who want fewer surprises, better client experiences, and stronger margins heading into the 2025 tax season. Download the overtime worksheets: PDF: Google / Excel: Learn more about tech-enabled firm growth at CountingWorks PRO : Thanks for listening—and for doing the work to build a smarter, more proactive firm.

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Overtime Deductions, Client Confusion & Smarter Tax Prep is an episode from The Growth Minded Accountant by Lee Reams II from CountingWorks PRO.

This episode is 15:39 long.

This episode was published on Jan 27, 2026.

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