New IRS Guidance: Up to $25K Tax Deduction for Workers Who Earn Tips!

IRS guidance is now available for the new tax deduction for workers who earn tips. The proposed regulations identify eight categories of jobs that qualify for the tip deduction. They include food service and hospitality workers, gambling dealers, home maintenance workers, golf caddies, and many others. “Qualified tips” are tips paid in cash or a cash equivalent, received from customers or through a tip-sharing pool. Tips must be paid voluntarily, rather than by negotiation or through a service charge. For 2025–2028, the annual maximum that an eligible taxpayer can deduct is $25,000, whether or not they itemize. There are also income limits. Here’s more: https://bit.ly/46vt4a3