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No Tax on Tips Calculator

From 2025 through 2028, workers in tipped jobs can deduct up to $25,000 of qualified tips from their federal taxable income. Enter your tips and income to see your deduction and roughly what it saves you.

$

Cash and card tips from a tipped occupation, as shown on your W-2 (box 7), 1099 or Form 4137.

$

For most people this is your AGI (Form 1040, line 11b).

Your top income tax rate. Used only for the savings estimate.

Your deduction$18,000Cuts your federal income tax by about $2,160 at 12%.
Tips that count (up to $25,000)
$18,000
Income phase-out
$0
Deduction (Schedule 1-A, line 13)
$18,000

Social Security and Medicare taxes still apply to your tips. State income tax depends on your state.

How the deduction works

The deduction is claimed on the new Schedule 1-A and lowers your taxable income, whether you take the standard deduction or itemize. It is capped at $25,000 per return, and the cap is the same for a single filer and a married couple filing jointly.

Above $150,000 of modified adjusted gross income ($300,000 for joint returns), the deduction shrinks by $100 for every full $1,000 over the line. A single filer with $175,000 of income loses $2,500, so the most they can deduct is $22,500.

What counts as qualified tips

Tips must be paid voluntarily by customers, in cash or by card, in an occupation on the IRS list of jobs that customarily received tips before 2025, such as servers, bartenders, hairstylists, delivery drivers and valets. Mandatory service charges do not count.

The tips have to be reported to you on a W-2, 1099 or other statement, or by you on Form 4137. You (or your spouse, if the tips are theirs) need a valid Social Security number.

Questions

Do I still pay Social Security and Medicare tax on my tips?

Yes. The deduction only lowers federal income tax. Payroll taxes on tips stay the same.

Do I have to itemize to claim it?

No. It is claimed on Schedule 1-A and works with the standard deduction too.

Is the $25,000 cap per person or per return?

Per return. A married couple filing jointly can deduct up to $25,000 in total, not $25,000 each.

Can married couples filing separately claim it?

No. Married couples must file a joint return to claim the tips deduction.

How long does the deduction last?

It applies to tax years 2025 through 2028 and ends after 2028 unless Congress extends it.

I'm self-employed and earn tips. Can I claim it?

Often yes, but only up to the net profit of that business, and not if the business is a specified service trade or business such as health, law or consulting.

Sources

Updated November 3, 2026. Estimates only, not tax or financial advice.

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