No Tax on Tips Explained: What Workers Need to Know (2025 Trump Tax Bill)
Video Overview & Insights
The “No Tax on Tips” provision in the new federal spending bill creates a special deduction for tipped workers, lowering what they owe in federal income tax starting in 2025. But tips are still subject to state and local income taxes as well as payroll taxes (Social Security and Medicare).
Oh no, a Fact Sheet... that won't fly
In this video, I explain who qualifies, what counts as qualified tips, the $25,000 deduction limit, and the income phase-outs, based on the latest IRS update.
0:00 One Big Beautiful Bill
Why do they tax tips anyway that was given as gratitude not out of obligation
0:56 What is a “No Tax on Tips” deduction
01:24 When does the deduction take effect?
as a resale business, customers tip us just because... they say "yall are awesome" or "yall have good conversation" "yall deserve it" etc... but we just resale goods , a resell shop... however we recieved a couple thousand in tips because its an option on our CC machine and people just decide to tip.... do you know, does that qualify ?
01:37 Is the “No Tax on Tips” deduction permanent or temporary?
01:53 Who is eligible for the “No Tax on Tips” deduction?
how would it be done if a nail tech received 1099 gross paid that included tips but employers did not specified how much was the tip amount.
03:21 What are "qualified tips"?
03:58 Is there a limit to the deduction amount?
What if you have an LLC?
04:18 Are there income limitations for claiming the deduction?
05:28 Does this deduction eliminate all taxes on tips?
Which one do I enter? Lol,
OvertimePay
*opspremot
Ddbtimepay
*opspremdt.
Im so confuse.
06:02 What about state and local taxes on tips?
06:16 Do I need to itemize deductions to claim this?
How are restaurants going to figure out what gratuity was freely given vs. an 18% mandatory gratuity for a party of 6 or more?
06:27 How will employers report these tips?
06:59 Non-cash tips
When you said income? Is it the gross income or the modified asjusted income?
IRS Fact Sheet: https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors
#notaxontips #trumptaxbill
Are 1099 bonuses reported in the same language as tips. I'm a delivery driver for a friends business.
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If I had a totol of $10,000 in C.C. tips. Would I receive that $10,000 back for the tax year ? Meaning. No tax on full amount of C.C. tips
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How does this apply to gig workers (i.e. DoorDash, Lyft, etc.)
Financial Advisor in Los Angeles, CA
CPA in Los Angeles, CA
I am a dealer in a casino in Nevada, my tips get reported 100% what does that mean for me? I am not paying taxes on the first 25k I make per year through 2028?
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Overall is this beneficial for your average waiter/bartender?
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I don't understand at all... I've never made enough to even file taxes..
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DISCLAIMER: This video is for informational purposes only and should not be construed as tax, financial, or legal advice. Every person’s situation is different, and you should consult with your own financial and tax advisor for advice specific to your situation. Comments are not reviewed.
So.. as a streamer.. I qualify right..? Twitch/YouTube/Fansly/Kick/other bullshit people are?
More User Perspectives
Great info!
@LouizaSmith