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No Tax on Tips Calculator: Tip Deduction Estimate

Estimate your federal qualified tips deduction: up to $25,000 a year, cut by $100 for every full $1,000 of MAGI over $150,000 ($300,000 joint).

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Good to know: Scope: the federal “no tax on tips” deduction (qualified tips deduction) on Schedule 1-A (Form 1040), Part II, for tax years 2025 through 2028. It follows the IRS form lines: your qualified tips as an employee (Form W-2 box 7 or Form 4137) plus tips from self-employment (limited to that business’s net profit), up to $25,000 per return; then, if your modified adjusted gross income (MAGI) is over $150,000 ($300,000 if married filing jointly), the excess is divided by $1,000, rounded down, and $100 is taken off for each step. Married filing separately and returns without a Social Security number valid for employment get $0. Not included: deciding which tips are qualified (voluntary tips only; the IRS occupation list), splitting tips across several employers, how to figure MAGI beyond your adjusted gross income plus excluded foreign and territory income, Social Security and Medicare tax, state income tax, and the overtime, senior and car loan interest deductions on the same schedule. The tax saving is a rough estimate from the bracket you type. Everything stays in this browser tab; nothing is sent or saved. Independent ToolsKo estimate, not tax advice. Sources reviewed November 13, 2026.

How to use it (step by step)

  1. 1Pick your filing status and answer the two yes/no questions: do you have a Social Security number valid for employment, and is your job on the IRS list of tipped occupations?
  2. 2Type your tips as an employee (Form W-2 box 7, or Form 4137 if you reported tips yourself) and any tips you got as a self-employed worker, with that business’s net profit.
  3. 3Enter your MAGI (for most people, the adjusted gross income on Form 1040) and your tax bracket, then read your deduction and the rough tax saving.

Words to know

Qualified tips
Voluntary cash or card tips customers give you, including tips shared with you, in a job that usually got tips by the end of 2024. A required service charge is not a tip.
Modified adjusted gross income (MAGI)
Your adjusted gross income from Form 1040, plus a few kinds of foreign or U.S. territory income that were left out. Most people’s MAGI is just their AGI.
Phase-out
The deduction shrinks as income rises: $100 less for every full $1,000 your MAGI is over $150,000 ($300,000 if married filing jointly).
Schedule 1-A
The IRS form, attached to Form 1040, where you claim the new tips, overtime, car loan interest and senior deductions.

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Sources & methods

References checked November 11, 2026. Read each tool’s scope and assumptions before relying on its result.

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