President Trump recently renewed his call for tax-free tips. He first mentioned eliminating taxes on tips during the 2024 campaign. The proposal was included in the 2024 Republican platform on a more limited basis, calling for tax-free tips “for millions of restaurant and hospitality workers.” But the president’s most recent call appeared to be considerably broader in scope. He said that for any worker “who relies on tipped income, your tips will be 100% yours.” Under current law, tips totaling $20 or more received in one month are treated as wages and subject to withholding. One bill introduced in Congress would provide a deduction for tip income, subject to various limits. Stay tuned.
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