JD Vance said "we ended taxes on tips" — but the 2025 tax law created a deduction, not a repeal. You can deduct up to $25,000 of tips from federal income tax, but only if your job is on the IRS list of 71 tipped occupations, and Social Security and Medicare tax still apply to every tip dollar — on $25,000 of tips that's about $1,913 you still pay. The deduction also expires after 2028 and shrinks once your income passes $150,000. Follow US Money Guide for daily money tips!
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