No Tax on Tips Calculator

Estimate how much of your tip income you can deduct under the federal No Tax on Tips rule and what it saves you. The deduction covers up to $25,000 of qualified tips per return for tax years 2025 through 2028, and phases down once modified AGI passes $150,000 (single or head of household) or $300,000 (married filing jointly).

To see what the deduction does to your refund with your wages, withholding and credits, use the tax refund calculator.

This calculator is for informational purposes only and gives an estimate, not a filing figure. Your actual deduction is computed on IRS Schedule 1-A, Part II, using the amounts on your information returns.

What each input means

The net-income field appears when you choose rideshare, delivery, salon, or "other," because those jobs are often self-employed. If you are a W-2 employee in one of them — a salon employee or a restaurant's own delivery driver — enter a net income at least equal to your tips so the self-employed ceiling does not cut your result.

On the SSTB question: until final rules on specified service businesses take effect, IRS Notice 2025-69 treats everyone in a listed tipped occupation as outside an SSTB, so answer "No" for now.

How the math works

The official worksheet is Schedule 1-A, lines 4 through 13:

1. Employee tips (line 4). With one employer, enter the larger of W-2 tips (line 4a) or tips from Form 4137 (line 4b).
2. Self-employed tips (line 5). Tips included on Form 1099-NEC box 1, 1099-MISC box 3, or 1099-K box 1a — never more than the business's net profit.
3. Add and cap (lines 6–7). The smaller of the total or $25,000.
4. Phase-out (lines 8–12). Subtract $150,000 ($300,000 joint) from MAGI, divide by $1,000, round down to a whole number, multiply by $100.
5. Deduction (line 13). Line 7 minus line 12, not below zero.

The reduction comes off your capped tips, which is how the Treasury regulations' own example works: $10,000 of tips at $180,000 of MAGI becomes a $7,000 deduction. When your MAGI is over $150,000 ($300,000 joint), work these five steps by hand as a cross-check; where the two disagree, Schedule 1-A governs.

Phase-out at a glance (single filer)

The $200,000 row matches the first example in the regulations: $26,000 of tips is capped at $25,000, then reduced by $5,000.

Which number to enter: occupation by occupation

Servers and bussers (TTOC 102–104, 109)

Where the number is: for 2025, Form W-2 box 7; for 2026 onward, box 12 code TP. If you received cash tips you did not report to your employer, Form 4137 adds them and computes the Social Security and Medicare tax you owe.

Example: A server reports $21,400 of tips in 2026 and has MAGI of $58,000. Enter $21,400; no phase-out applies. After the $16,100 standard deduction, taxable income is $41,900 before the tip deduction and $20,500 after it — both inside the 12% bracket, which runs from $12,400 to $50,400 for single filers in 2026. The saving is $21,400 × 12% = $2,568.

Bartenders (TTOC 101)

Where the number is: the same W-2 boxes as servers, reflecting tips you kept after tipping out bar backs.

Example: A bartender collects $34,000 in tips and tips out $6,000 to bar backs. Reported tips are $28,000, so enter $28,000; the deduction is capped at $25,000. At a 22% marginal rate, the estimated saving is $5,500.

Casino dealers and gaming staff (TTOC 201–204)

Where the number is: W-2 box 7 (2025) or box 12 code TP (2026+). Under a Gaming Industry Tip Compliance Agreement, the W-2 reflects your agreed tip rate; add any extra tips you reported on Form 4137.

Example: A craps dealer's W-2 shows $19,500 of tokes reported at the agreement rate, and the dealer reports another $1,500 on Form 4137, whose line 1 shows $21,000 of total tips received. With one employer, Schedule 1-A uses the larger of line 4a or 4b, so the qualified amount is $21,000. Entering $21,000 at 12% estimates a $2,520 saving.

Two tipped spouses filing jointly

Where the numbers are: each spouse's own W-2 or 1099s. Add them together before entering.

Example: One spouse receives $15,000 of qualified tips and the other $20,000, and joint MAGI is $200,000. The combined $35,000 is capped at $25,000 because the limit applies per return, and no phase-out applies below $300,000. This mirrors the joint-filer example in the regulations. Each spouse whose tips are claimed needs a valid Social Security number on the return.

Hotel and housekeeping staff (TTOC 301–304)

Where the number is: W-2 tips, which include cash left in rooms or handed to a bellhop only if you reported them to the hotel by the 10th of the following month.

Example: A housekeeper reports $3,200 of envelope tips over the year and has MAGI of $41,000. Enter $3,200. At 12%, the saving is about $384. A mandatory housekeeping fee on the guest's bill that the hotel shares with staff is wages, not tips, so leave it out.

Food-delivery drivers (TTOC 804)

Where the number is: for app-based couriers, the platform's Form 1099-K box 1a or 1099-NEC includes tips. Use the app's annual summary to split tips from delivery pay. For restaurant-employed drivers, use W-2 tips.

Example: An app courier earns $14,000 in delivery pay and $9,000 in tips, and claims $10,500 of vehicle and phone expenses. Net profit is $12,500, so the tip deduction is limited to $9,000 (tips are less than net profit). Enter $9,000 in tips and $12,500 in net income. If expenses had been $16,000, net profit would be $7,000 and the deduction would drop to $7,000.

Rideshare and taxi drivers (TTOC 802)

Where the number is: the platform's 1099-K or 1099-NEC plus the app's tax summary that separates tips from fares.

Example: A rideshare driver has $38,000 in fares, $6,200 in tips, and $19,000 in expenses, so net profit is $25,200. Enter $6,200 in tips and $25,200 in net income. The deduction is $6,200; at 12% the income tax saving is about $744. Self-employment tax still applies to the full $25,200 of net earnings.

Salon, barber, and nail workers (TTOC 601–607)

Where the number is: W-2 tips if you are a salon employee; the 1099s you receive if you rent a booth or suite.

Example (booth renter): A self-employed manicurist has $55,000 of service fees, $20,000 of 1099-reported tips, and $60,000 of expenses including booth rent. Net profit is $15,000, so the deduction is limited to $15,000 — the same result as the example in the Treasury regulations. Enter $20,000 in tips and $15,000 in net income.

How to read your result

• Available after phase-out shows the room left under the rules at your MAGI.
• Your tip deduction is the estimate for Schedule 1-A line 13.
• Tax savings multiplies the deduction by the marginal rate you chose. It is an upper-bound estimate when the deduction drops you into a lower bracket.

Using the estimate during the year

You do not have to wait for your W-2 to use this number. Take your year-to-date reported tips from your latest pay stub, divide by the months worked so far, and multiply by 12 to project the year. If the projected deduction is large, you can enter it as a deduction in Step 4(b) of a new Form W-4 so your employer withholds less income tax each paycheck instead of you waiting for a refund; the tax withholding calculator shows the per-paycheck effect. Self-employed drivers and stylists can lower their quarterly estimated payments the same way.

Common input mistakes

• Entering gross tips before tip-outs.
• Including automatic gratuities or service charges.
• Entering both spouses' tips and expecting $50,000 — the joint cap is still $25,000.
• Leaving the net-income field at the default when you are self-employed with large expenses.
• Choosing married filing jointly when you plan to file separately; separate filers cannot claim it.

For the eligibility rules behind each occupation, including tip pools, the service-charge test, and how W-2 and 1099 reporting changed in 2026, read the no tax on tips guide. If you also earn overtime, compare the two deductions in tips vs overtime and run the no tax on overtime calculator. To add every new deduction together, use the WFTC savings estimator.