The No Tax On Tips Act
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wrote 18 days ago last edited by Axtremus
https://www.washingtonpost.com/politics/2025/05/21/no-tax-on-tips-act-passes-senate/
The Senate passed, by unanimous consent, the No Tax On Tips Act.
The gist is to allow deduction, up to $25k of "cash tips", from federal income by taxpayers "in an occupation which traditionally and customarily received tips on or before December 31, 2023."
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wrote 18 days ago last edited by
My silent protest will be to lower my normal tip rate to 15%.
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wrote 18 days ago last edited by
Here's the President getting a 15% tip. Obviously, he doesn't pay much income tax anyway so it won't affect him.
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wrote 18 days ago last edited by
The ridiculous part? Most tips go unreported anyway…
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wrote 18 days ago last edited by
Luke’s going back to work at Benihanas for the early part of the summer and is planning on switching or working another serving job while finishing his 1 year nursing intensive. (Benihanas is very seasonally dependent, June and December are huge months, the others aren’t as busy and he can make more at a high end steak place like Capitol Grill or Bourbon Blvd). He will likely be making a lot more than $25K in tips…
I wonder how this works in actuality… Is the $25K counted as the first $25K in income? Then, every penny above that they earn would be starting at 12%…
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wrote 18 days ago last edited by
My guess is the W-2 will contain a tip line item which will just be excused from AGI calculations (up to 25k) and taxes work the same on remaining income.
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Here's the President getting a 15% tip. Obviously, he doesn't pay much income tax anyway so it won't affect him.
wrote 18 days ago last edited by@Doctor-Phibes said in The No Tax On Tips Act:
Here's the President getting a 15% tip.
Tip? Shit, he’s getting the whole thing.
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wrote 17 days ago last edited by
Hmm, this actually opens up a shit ton of confusion for Karla’s business. Most of the service providers are 1099NECs. A fair amount of their income is tip income, but the 1099NEC has no line item for tips. It’s all compensation… Karla’s scheduled to take over ownership next year, and will need to deal with this This will have a pretty big and weird effect on 1099 gig and service providers. All those UBER, LYFT, and Door Dash drivers are facing the same thing.
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wrote 17 days ago last edited by
But it’s nice that Strippers will be reporting $25K more in income…
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wrote 17 days ago last edited by
I would imagine the IRS will introduce a line item for qualifying tip income on 1099 and W-2 forms.
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I would imagine the IRS will introduce a line item for qualifying tip income on 1099 and W-2 forms.
wrote 17 days ago last edited by@jon-nyc said in The No Tax On Tips Act:
I would imagine the IRS will introduce a line item for qualifying tip income on 1099 and W-2 forms.
It’s still going to be difficult. The law is written that it has to be jobs that traditionally received tips prior to 2023. How do you prove that when official tax documentation didn’t show tip income? It’s a growing concern for the gig economy anyway since pro-labor Departments of Labor have been going after gig work in general, and this Department of Labor is as pro-labor as any in the last 40 years…
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@Doctor-Phibes said in The No Tax On Tips Act:
Here's the President getting a 15% tip.
Tip? Shit, he’s getting the whole thing.
wrote 17 days ago last edited by@jon-nyc said in The No Tax On Tips Act:
@Doctor-Phibes said in The No Tax On Tips Act:
Here's the President getting a 15% tip.
Tip? Shit, he’s getting the whole thing.
In mother russia, waiter tips YOU!
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wrote 16 days ago last edited by
@jon-nyc said in The No Tax On Tips Act:
My silent protest will be to lower my normal tip rate to 15%.
Yup, and i know in some US states/cities, waiters are required to receive minimum wage.
I will never understand tipping where is becomes an expectation and not a reward as it was (I think) intended.
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wrote 16 days ago last edited by
I’m getting really tired of tipping while standing at a counter. Maybe if I ordered some fancy dessert drink involving the barista but not when they pour me a cup of drip.
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I’m getting really tired of tipping while standing at a counter. Maybe if I ordered some fancy dessert drink involving the barista but not when they pour me a cup of drip.
wrote 16 days ago last edited by@jon-nyc said in The No Tax On Tips Act:
I’m getting really tired of tipping while standing at a counter. Maybe if I ordered some fancy dessert drink involving the barista but not when they pour me a cup of drip.
The general idea of tipping at that type of situation was pocket change… You buy a cup of coffee, it came to $2.83 with tax. Rather than walk around with another dime, nickel, and a couple of pennies, you can drop it into the jar… Now they expect the same tip that you would get for a high-end sit down restaurant.
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wrote 16 days ago last edited by
Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.
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Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.
wrote 16 days ago last edited by@jon-nyc said in The No Tax On Tips Act:
Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.
I tipped 15% at our hotel breakfast buffet over the weekend. They are still cleaning up after me, and generally were also prepping the food and getting it to the buffet.
How do you treat ToGo?
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wrote 16 days ago last edited by jon-nyc
I tipped 10. If the price had been more reasonable I might have tipped more.
Stand up it depends. It’s usually easier to hit the smallest preset option than customize and there usually not that much money involved. At a counter I’m ordering a coffee or maybe coffee and bagel.
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wrote 16 days ago last edited by
I wonder if this act will be the catalyst that gets McDonald’s, etc to rollout tipping.
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Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.
wrote 16 days ago last edited by@jon-nyc said in The No Tax On Tips Act:
Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.
Customize it, especially if it lets you put in a negative percentage.
