6. 2025 Tax Changes: Tip Income Can Be Deducted
2025 Tax Changes: A deduction for workers in tip-based jobs
Eligible workers may deduct up to $25,000 in qualified tips from taxable income.
This applies only to industries where tipping is customary.
Pros
- Helps service workers with moderate income
- Reduces taxable earnings
Cons
- Many low-income workers already owe little tax
- Detailed documentation required
- Income limits apply
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