"No Tax on Tips"
Tax Deduction Guide for Tipped Workers
miscentavos.com
Maximum Deduction Available
$25,000
For qualified tips received by Dec 31, 2024
What Qualifies vs. What Doesn't
Qualified Tips
- Voluntary cash tips
- Charged tips on credit cards
- Tips from tip-sharing arrangements
- Tips from IRS-listed occupations
Not Qualified
- Mandatory service charges
- Tips from SSTB businesses
- Tips as SSTB employee
- Auto-gratuity charges
Who Can Claim This?
🍽️ Employees
Workers in tip-receiving occupations listed by the IRS. Must report tips to employer or IRS.
💼 Self-Employed
Can deduct up to net profits from their business (limited to business income minus expenses).
📋 Both!
Available to itemizers AND non-itemizers. Everyone can benefit from this deduction.
Income Phase-Out Limits
Deduction begins to phase out at these income levels:
Single Filers
$150K
Joint Filers
$300K
Important Requirements
- Must have valid Social Security Number for employment
- Married taxpayers MUST file jointly to claim
- Tips must be properly reported to employer or IRS
- Must work in an IRS-listed tip occupation
Key Dates & Timeline
Dec 31, 2024
Tips must be received on or before this date to qualify
Oct 2, 2025
IRS publishes official list of qualifying tip occupations
Tax Year 2025
Transition relief available for taxpayers and employers