08/31/2026
"For example, based on the federal tax brackets for 2025, if a tipped worker with taxable income between $11,926 and $48,475, with a 12% marginal tax rate, received a $10,000 deduction from their federal taxable income, the tax savings from that deduction would be about $1,200. If that same person received a $7,000 deduction, their federal income taxes would be reduced by $840.
In theory, as the deduction amount and marginal tax rate increase, so does the potential tax cut. As the Bipartisan Policy Center noted in February, the largest tax cut possible would be about $6,000 for someone in the 24% tax bracket with the highest gross income – $150,000 for a single filer and $300,000 for a married couple – allowed to claim the full $25,000 tip deduction."
The White House has provided no federal data to support President Donald Trump's claims that because of his "no tax on tips" policy, “440,000 tipped workers” in Nevada “saved an average of $10,000 on their taxes,” and “130,000 tipped workers” in Georgia “saved an average of more than $...
