I was aware of all that.It's a big bill, but take your comment on tips.
Google AI:
trump big beautiful bill details on tips
The "no tax on tips" provision in the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, is a federal income tax deduction for workers in service-heavy industries. While it does not eliminate all taxes on tips (payroll and state taxes still apply), it allows eligible workers to deduct up to $25,000 of reported cash tips from their taxable income. [1, 2, 3, 4, 5]
Key Details on Tip Provisions
- Max Deduction: Up to $25,000 annually for individuals or per tax return for married filers.
- Income Phase-out: The benefit begins to phase out for those with a Modified Adjusted Gross Income (MAGI) over $150,000 (single) or $300,000 (married filing jointly).
- Eligible Occupations: Limited to jobs that "customarily receive tips," such as bartenders, waiters, casino dealers, and barbers. The Treasury Secretary maintains the official list of eligible job categories.
- Duration: The provision is temporary, currently set to apply for tax years 2025 through 2028.
- Retroactivity: The law applies to tips earned throughout 2025, meaning workers can see the impact when filing their 2025 tax returns in 2026. [1, 2, 3, 4, 5, 6, 7, 8, 9]
Critical Limitations
- Federal Income Tax Only: Workers are still responsible for paying Social Security and Medicare (payroll) taxes on their tips, as well as any applicable state and local taxes.
- Reporting Requirements: Only cash tips reported to employers for payroll tax withholding are eligible for the deduction.
- Standard vs. Itemized: The deduction is available regardless of whether you take the standard deduction or itemize your return. [1, 2, 3, 4]
Wider Impact
The Internal Revenue Service notes that this policy change is part of a broader tax-and-spending package that also includes a "no tax on overtime" provision and an increased Child Tax Credit. Opponents argue the policy creates an unfair burden by taxing different types of income differently (e.g., a waiter vs. a line cook), while proponents view it as a direct win for the service-industry workforce. [1, 2, 3, 4, 5]
That was pretty much common knowledge....and it met to help low income earners....if you are making $300kf, well you are maxed out at $25K deduction on those tips....which is a lot of tip money