Zaher Fallahi, Certified Public Accountant-CPA

11/27/2025

Happy Thanksgiving to all my colleagues — attorneys, CPAs, other professionals, and dear friends.

I am truly grateful for your support, your professionalism, and the spirit of collaboration we share throughout the year.

Wishing you and your families a warm, joyful, and peaceful Thanksgiving holiday.

May the season bring you good health, happiness, and continued success.

With appreciation

Zaher

11/24/2025

New IRS Guidance: Major Tax Breaks for Tipped & Overtime Workers in 2025
On Nov. 21, 2025, the U.S. Treasury and IRS released new guidance that may offer significant tax savings for millions of workers who earn tips or overtime pay.
While the official rules appear in IRS Notice 2025-69, below is a clear overview of what workers should know.
“No Tax on Tips” — Key Change”

From 2025 through 2028, workers who receive qualified tips may be eligible for a deduction of up to $25,000 per year.
Who may benefit
• Servers and bartenders
• Hotel and hospitality workers
• Salon and spa professionals
• Rideshare and delivery drivers
• Tour guides
• Individuals who receive tips, including the self-employed
Income limits
• Phases out above $150,000
• $300,000 for joint filers
How to document tips
Workers may rely on:
• Tips reported on a W-2
• Tips reported on Form 4137
• Tips reported to an employer
• Personal records for self-employed individuals
👉 Accurate records are essential.

“No Tax on Overtime” — New Deduction”
For 2025–2028, workers may deduct the overtime premium portion of their pay — generally the “half” in time-and-a-half wages.
Maximum deduction
• $12,500 per year
• $25,000 for joint filers
Key points
• Available whether or not you itemize
• Applies to legally required overtime premiums
• Certain exempt employees may not qualify
Examples
• Overtime premium of $5,000 → May deduct $5,000
• $15,000 total overtime pay → One-third ($5,000) may qualify
• Double-rate overtime → Only the premium portion counts
This guidance does not change labor rules; it provides a tax deduction opportunity.
Action Steps for 2025
📌 Track tips and overtime carefully
📌 Retain pay stubs, logs, and payroll statements
📌 Review updated IRS forms during filing season
📌 Confirm eligibility based on income limits
These benefits are not automatic—they must be claimed on the tax return.
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Why It Matters
• Millions of workers rely on tips and overtime
• Deductions may substantially reduce taxable income
• Self-employed individuals may qualify with proper documentation
• Non-itemizers may also benefit
In short: This guidance may create meaningful tax savings for eligible workers.

Zaher Fallahi, Tax Attorney & CPA
Advises clients nationwide on federal tax matters, including cryptocurrency taxation. Holds an MIT Blockchain Certificate.
📞 (310) 719-1040 | (714) 546-4272 | (877) 687-7558
🌐 zflegal.com | zfcpa.com
📧 [email protected]

11/15/2025

🔍 IRS Issues Rev. Proc. 2025-31: Staking Digital Assets in Trusts
The IRS has issued Revenue Procedure 2025-31, a landmark development in crypto taxation and digital-asset compliance.
For the first time, certain investment trusts classified as grantor trusts may stake digital assets without losing their favorable tax status. This new safe harbor provides long-awaited clarity for sponsors of crypto exchange-traded products (ETPs) and other blockchain-based trusts.
💡 What Changed
Previously, earning staking income within a grantor trust could have disqualified it from grantor-trust treatment. Now, under Rev. Proc. 2025-31, qualifying trusts may stake assets on proof-of-stake blockchains and still be treated as investment/grantor trusts for federal income-tax purposes.
⚙️ Key Safe-Harbor Requirements
✅ Hold only one type of digital asset and cash.
✅ Stake through a custodian that operates independently from the staking provider.
✅ Indemnify against slashing losses caused by validators.
✅ Maintain a liquidity reserve to meet redemption requests.
✅ Distribute staking rewards quarterly, in-kind or as cash.
✅ Amend trust agreements within nine months beginning Nov. 10, 2025 to comply.
🧾 Tax & Compliance Implications
Rev. Proc. 2025-31 addresses trust classification, not tax reporting of staking income. Key questions remain:
• How will Form 1099/1042-S reporting apply to staking distributions?
• What is the source and character of staking rewards paid in cash?
• How will withholding apply to non-U.S. investors?
Further IRS or Treasury guidance is likely as digital-asset taxation continues to evolve.
📈 Why It Matters
This safe harbor enables crypto-based trusts to participate in blockchain validation while preserving tax transparency, potentially improving both network security and investor efficiency.
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Zaher Fallahi, Attorney at Law & CPA
Crypto Tax Attorney | OFAC & International Tax Expert | MIT-Certified in Blockchain Technology
📍 Los Angeles & Orange County, California 🌐

We provide our clients with expert legal and tax advice on Foreign Bank Accounts, Voluntary Disclosure Program (OVDP), Tax Audit Representation, OFAC & Estate Planning.