Help with No Tax on Tips for self employed worker that doesn't make enough to get a 1099

Forum|Forum|3 months ago
April 8, 2026
1 reply
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I need help identifying if my daughter has any options to take advantage of the No Tax on Tips tax change this year. She is self employed and does nails. Most of her payments go through Venmo including tip which does actually show up if she gets a statement. The issue that I am running into is that because she doesn't bring in over $20K in payments Venmo does not issue a 1099. So is she out of luck? If she was making more money she would qualify for the deduction, but because she isn't making enough she can't? Seems like the bill isn't really helping the people that need it he most if that is the case.

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SharonD007

Level 14

Self-employed taxpayers that work in a line that receives tips are eligible to take the deduction. Tips are reported on Schedule C and are capped at Net Income.

Resources for No tax on Tips:

IRS guidance for individuals who received tips or overtime during tax year 2025

The Tipped Worker's Guide

Tip Recordkeeping and Reporting

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NCperson

Level 15

@SharonD007 -

While all worldwide income must be reported, and that would income tips as income on Sch C for someone who is self-employed, the 'no tax on tips' benefit would only be available if reported on a 1099.

See this link:

https://www.irs.gov/newsroom/one-big-beautiful-bill-how-to-take-advantage-of-no-tax-on-tips-and-overtime

and specifically this line:

Taxpayers may be able to claim a deduction for qualified tips paid to them in 2025 that are included on Form W-2, Form 1099-NEC, Form 1099-MISC, Form 1099-K, or reported directly by them on Form 4137.

So if the tips are not reported on a 1099-NEC, MISC, K, then how is there a benefit? The OP states they did not receive a 1099.