The "No Tax on Tips" provision, part of Trump's One Big Beautiful Bill Act, allows tipped workers to deduct up to $25,000 of reported tip income for the 2025 tax year. This temporary provision expires in 2028. The deduction requires workers to report their tips for tax filing purposes, and payroll taxes will still apply. Eligibility includes workers earning up to $150,000 annually, or $300,000 for joint filers, adjusted for inflation. It aims to benefit service workers relying on tips and expands business tax credits for tips.
The "No Tax on Tips" provision allows eligible tipped workers to deduct up to $25,000 of reported tip income from their federal income taxes for the 2025 tax year.
The No Tax on Tips deduction applies to those earning up to $150,000 a year, or $300,000 for joint filers, adjusted annually for inflation.
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