What is the no-tax-on-tips deduction for 2026?
The One Big Beautiful Bill Act created a new federal deduction of up to $25,000 per taxpayer on qualified tip income for tax years 2025 through 2028. The deduction is available whether you itemize or take the standard deduction, but phases out for taxpayers with modified adjusted gross income above $150,000 (single) or $300,000 (married filing jointly), and applies only to occupations the IRS designates as customarily and regularly tipped.