How can I deduct tips if I'm a self-employed hair-stylist without a w2 or 1099?

[CesarJ]

To enter your self-employment income and expenses as a hair stylist in TurboTax Online, including tips without a W-2 or 1099, follow these steps:

1. Go to the Wages & Income section.
2. Select Start or Update next to Self-Employment Income and Expenses (Schedule C).
3. Answer "Yes" when asked if you had any self-employment income or expenses.
4. On the business summary page, select Review next to your work.
5. Proceed through the questions until you reach the income entry screen.
6. Choose Other self-employed income to enter cash tips and other income not reported on 1099 forms.
7. Enter your total cash tips and other income there.
8. Continue to enter your business expenses such as supplies, rent, or vehicle expenses.

TurboTax will guide you through categorizing expenses to maximize deductions.

[jonmerwin]

I'm able to enter the tips but it doesn't allow me to deduct them

[Vanessa A]

Self-employment tips aren't eligible for the deduction if they are not reported to the IRS on a 1099-K, 1099-NEC, or 1099-MISC.  In order to be deducted, they must be reported on a 1099 for self-employed individuals.   There has been no guidance issued from the IRS to state otherwise as of yet.    

 When you click on the "This income includes tips" learn more link you will see that at this time those tips are not deductible. This box is for just in case there is further guidance issued by the IRS that says these tips that are NOT reported on a 1099 for self-employed individuals would become deductible.  So entering the tips is for the just in case.  It is putting it in a spot to possibly deduct it from your income at a later point. 

No Tax on Tips: How It Works in the One Big Beautiful Bill