68 Jobs Get Tax-Free Tips: Here’s Who Benefits

Tip Jar
 

A leaked Treasury list reveals 68 professions that may soon qualify for tax exemptions on tips—

a significant break for service workers starting in 2025.

 
Barista/cashier during an exchange. Photo by Mathias Reding on Unsplash

Who’s on the list:

  • Food & Beverage Service: Bartenders, waitstaff, cooks, dishwashers, host staff, and bakers.

  • Entertainment & Events: Dealers, gamblers, musicians, dancers, DJs, digital creators, and ushers.

  • Hospitality: Bellhops, concierges, desk clerks, and housekeepers.

  • Home Services: Electricians, landscapers, plumbers, and repair workers.

  • Personal Services: Photographers/videographers, event planners, tutors, babysitters, and pet sitters.

  • Wellness & Appearance: Hairstylists, massage therapists, makeup artists, fitness instructors, and tattoo artists.

  • Recreation & Instruction: Caddies, tour guides, pilots, and instructors.

  • Transportation & Delivery: Taxi/ride-share drivers, valet, delivery workers, movers, and boat operators.

 
The back of an American one, ten, and twenty dollar bills, United States currency. Photo by Ryan Quintal on Unsplash

The Tax Break:

  • Effective for tax years 2025–2028, individuals in these roles can deduct qualified tip income received in listed occupations.

  • Qualified tips include voluntary cash or charged tips reported via W‑2, 1099, or Form 4137.

  • Maximum deduction: $25,000 per year; self‑employed cannot deduct more than their net income from that business.

  • Phase‑out kicks in at modified AGI above $150,000 (or $300,000 for joint filers).

 
Close up image of the Internal Revenue Service sign in Washington D.C. Photo by Sean Lee on Unsplash

Upcoming IRS Action:

By October 2, 2025, the IRS must officially publish the occupation list, defining which roles are “customarily and regularly” tipped as of December 31, 2024.

 
A plant sprouting from coins in a clear glass. Photo by micheile henderson on Unsplash

Why This Matters:

  • These new deductions could mean significant savings for millions of service professionals.

    However, practical hurdles remain: IRS needs to finalize definitions, clarify reporting requirements, and integrate this into tax software and guidance.

 

Not sure if this applies to you? Then please feel free to reach out by clicking here


Next
Next

Trump Signs “One Big Beautiful Bill” Extending Tax Cuts and Cutting Safety Nets in July 4 Ceremony