Skip to main content
Level 1
April 14, 2026
Question

Turbo Tax did not ask about the new tips deduction while inputting info for Self-employed hair stylist

  • April 14, 2026
  • 1 reply
  • 26 views
Big beautiful bill tip deduction

1 reply

Level 15
April 14, 2026

How did you enter the income?  If the income was reported on a 1099-K, then you should see a box under the list of types of income to enter for business that says check this box if some of this income includes tips.  

 

Note:  if you did not get a 1099-K or a 1099-NEC you would not be able to claim the tips.  You cannot claim tips that are not reported to the government on a standard form.  Many people who are self-employed are not eligible for the tip deduction. 

 

In order to claim tips, the following must apply:

  • The tips MUST be reported.  If they are not reported on a form to the IRS you cannot claim them for the no tax on tips deduction.
    • If employed they need to be reported on your W-2 or form 4137
    • If self-employed, they must be reported on a 1099.  If you received them as cash, they are not deductible. 
  • Your income must be below $150,000 if you are single or less than $300,000 if Married Filing Jointly.  Above these amounts, the deduction starts to fade out and is not available at all for those with income over $400,000 for single and $550,000 for Married Filing Jointly.
  • You can not claim this deduction if you are Married Filing Separately
  • You receive tips from an occupation that normally and customarily receives tips

Self-employed, deduction may not exceed individual’s net income, without regard to this deduction, from the trade or business in which the tips were earned.
 

 

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"