Sen. Rand Paul speaks to reporters outside the U.S. Capitol following the Senate’s passage of Trump’s tax bill.

Now that President Donald Trump signed the bill, workers will be able to deduct up to $25,000 in reported tips and $12,500 in overtime pay from their taxable income on their federal tax returns. This means you won’t see an immediate boost in your take-home pay — taxes will still come out of your paycheck — but when you file for 2025 early next year,

The law permanently extends the 2017 Tax Cuts and Jobs Act (TCJA) provisions, which include lower tax rates and increased standard deductions that have been in place since 2018.