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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Transcript

We know that everyone digests information differently. That’s why we’re now sharing the full transcript of each episode of The Growth Minded Accountant right here on the CountingWorks PRO blog. Whether you’re short on time, like to scan and highlight, or simply prefer reading over listening, you can catch up on every conversation at your own pace.

Each week, we cover topics that matter most to tax and accounting professionals—from AI and automation to marketing strategies, firm growth, and client relationships. Scroll down to read the full episode, or subscribe to the podcast to listen on the go.