TipDiary

No Tax on Tips Calculator

Estimate your federal tips deduction for tax years 2025–2028 under the One Big Beautiful Bill Act (OBBBA). Enter a few details and see your deduction, the $25,000 cap, any income phase-out, and a plain tax-savings range.

2027–2028 are covered by the law, but IRS bracket tables aren't published yet.
$
Your reported tips for the whole year (cash + card, net of any tip-out).
Used for the income phase-out and to pick your tax bracket.
The deduction only applies to occupations on the Treasury tipped-occupation list.
$
Your deduction can't exceed your net profit from the tipped business.

Enter your annual tips above to see your estimate.

Track every shift. Export your tax packet in one tap.

TipDiary is the 30-second daily tip diary for U.S. service workers — with this deduction math built in. Log shifts free, forever; Pro does the tax packet.

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Frequently asked questions

Which jobs qualify for the No Tax on Tips deduction?

Only occupations that "customarily and regularly" receive tips — as listed by the Treasury Department and IRS — qualify. The list covers roles like bartenders, wait staff, hairstylists, nail technicians, delivery and rideshare drivers, musicians, and more. If your occupation isn't on the list, the deduction generally doesn't apply, even if you receive tips. Use the occupation picker above to check whether yours is included.

How does the income phase-out work?

The deduction starts to shrink once your modified adjusted gross income (MAGI) rises above $150,000 (single or head of household) or $300,000 (married filing jointly). For every full $1,000 you're over that threshold, the deduction is reduced by $100. The number of $1,000 steps is rounded down — so being $999 over the line doesn't reduce anything yet.

How much can I deduct? Is there a cap?

Yes. The maximum deduction is $25,000 per tax return, per year. Qualified tips above $25,000 don't add to the deduction (though they're still taxable income). The cap is before any income phase-out.

I'm married filing separately — can I claim it?

No. Married taxpayers who file separately are not eligible for the No Tax on Tips deduction. To claim it while married, you generally must file jointly.

Do I need a Social Security number to claim it?

Yes. The deduction requires a valid Social Security number on your return — without one it can't be claimed. An ITIN (Individual Taxpayer Identification Number) is not an SSN and doesn't satisfy this requirement.

I'm self-employed — how is it different?

If you're self-employed, your qualified-tips deduction can't be larger than your net profit from that tipped business. Also, tips earned in a "specified service trade or business" (SSTB) may not qualify at all. If you're unsure whether your work counts as an SSTB, check with a tax professional.

Do cash tips count?

Yes — cash tips still qualify, but only if they're reported. Tips you report to your employer show up on your W-2. Cash tips you didn't report to an employer may need to be reported yourself, typically on Form 4137. Unreported tips can't be deducted.

I work for more than one employer — does that matter?

The $25,000 cap is per tax return, not per job. Add up your qualified tips from every employer for the year; the deduction applies to the combined total, up to the cap.

Does this get rid of Social Security and Medicare (FICA) taxes on tips?

No. This is a federal income-tax deduction only. Social Security and Medicare (FICA) taxes — and any state or local taxes — still apply to your tips as usual.

When does the No Tax on Tips deduction expire?

Under current law (the OBBBA), the deduction applies to tax years 2025 through 2028. Unless it's extended, it isn't available after 2028.

Is this the same as my tax software? Is it official?

No. This is an independent estimate to help you plan. The actual deduction is claimed on your federal return (the IRS provides Schedule 1-A for it). We're not affiliated with the IRS or Treasury, and this tool is an estimate — not tax advice.