@RR4544* wrote:
It is over 1 month later and this issue has still not been resolved (a big update was provided this morning without a fix). Is Intuit working on it ? “Wait for a potential fix” is not practical advice … I have used TurboTax for 38+ years, but without anything more firm, I am going to have to change to one of your competitors (eg. H&R Block).
What fix?
Whether you like it or not, section 224(a) of the OBBB says that a deduction will be allowed for tips reported on required reporting forms such as W-2 and 1099 forms, or reported on form 4137. Form 4137 is for W-2 workers who must report additional tips that were not reported to the employer and not subject to social security and medicare tax. Form 4137 can't be used by self-employed people to report tips.
The proposed regulations are here.
https://www.federalregister.gov/documents/2025/09/22/2025-18278/occupations-that-customarily-and-reg...
If you are self-employed, and your tips are not included on a 1099, you can't deduct them. That's how the law was written. Don't blame Turbotax or the IRS. Blame Congress. And in the future, ask for your tips via a payment service so you get a 1099-K.
