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No Tax on Tips for Self Employed Hairdressers?

If you are a self employed hairdresser you do not get a W2! You have to keep a record of your income & tips. Schedule 1A should be the place to enter your “No Tax on Tips” exemption. Turbo Tax Home and Business will not let me enter my wife’s tips.

it says that self employed can not get the tip exemption but IRS publications says you can.

Please help us enter this tip exemption, want to file our Taxes.

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3 Replies
DawnC
Employee Tax Expert

No Tax on Tips for Self Employed Hairdressers?

You can't take the deduction unless it is reported to you on a tax form.   Her expenses and income gets reported on Schedule C, not in the personal income, w-2 section.   How to enter self-employed income and expenses

 

What self-employment expenses can I deduct?  

 

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.    From the IRS

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No Tax on Tips for Self Employed Hairdressers?

You highlighted the IRS publication where it tells about the 1099’s etc. 

Read the paragraph above it where it says that self employed can deduct their tips in the profession of SALON WORKERS!

thanks

LeticiaF1
Employee Tax Expert

No Tax on Tips for Self Employed Hairdressers?

You are correct salon workers are listed as qualified occupations who are elegible to deduct qualified tips.  In your case, to be able to claim the tips, they must have been reported to you on a Form 1099-NEC.   You need to enter your Form 1099-NEC in the Self-employment section of TurboTax, in the Wages and Income area. 

 

After you enter your Form 1099-NEC you will be asked if any of the income reported in box 1 is from tips. When you answer "yes" you will be able to enter your tip income and will be asked some questions to see if it qualifies for a deduction.


@user17701358437 

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