No Tax on Tips calculator

Your federal tip deduction for tax years 2025–2028, computed exactly as IRC §224 does it — cap, phase-out, floor-down rounding and all. Free, no signup, nothing leaves your browser.

Voluntary cash/card tips + tip-share received, minus tip-outs you paid — in an IRS-listed tipped occupation. Mandatory service charges don't count.

How the math works

Under IRC §224 (the "No Tax on Tips" provision, tax years 2025–2028):

  • Cap: the deduction is your qualified tips up to $25,000 per tax return — the cap doesn't double for married couples.
  • Phase-out: reduce the capped amount by $100 for every whole $1,000 your MAGI exceeds $150,000 (single or head of household) / $300,000 (married filing jointly). The excess rounds down to whole thousands — in your favor.
  • Hard rules: married filing separately isn't eligible; a work-eligible Social Security number is required; the deduction works alongside the standard deduction.
What it doesn't do: it reduces federal income tax only. Social Security & Medicare taxes still apply to your tips, your withholding doesn't change (the benefit arrives at filing), and most states still tax tips. This calculator is an educational estimate, not tax advice.

Want this computed automatically, shift by shift, all year — with the records the IRS expects? That's TipTotal for iPhone.