Hi Friends,
The 2025 tax code allows filers to write off up to 25K in tips as long as their adjusted gross income isn’t above $150,000 ($300,000 if married filing jointly). What surprised me was the list of qualified tipped professions, from this preliminary US Treasury document1, including:
- photographers
- digital creators
- self-enrichment teachers
- entertainers and performers
- home maintenance workers
- plumbers & electricians
- elderly companions
- childcare providers, nannies, etc.
- and of course, the classically understood tipped professions like servers, hosts, hairdressers, maids, concierges, etc.
Not only are some professionals apparently qualified to receive tips, it’s easy to see fuzzy lines develop around what is a payment and what is a tip, which gives middle- and working-class families more tax-loopy, value-realizing, negotiating power.
The top 25% of wealth holders routinely reclassify earnings to decrease their tax burden and improve their lifestyles, so why not the ethical working and middle classes? We are in this together after all.
The two-sided-timing of tipping is intriguing too: a tip has been defined both as an up-front payment “To Insure Promptness,” and as a percentage-based “thank you token” given after the fact. This means there is great flexibility in when a tip-based exchange can happen.
Given these two definitions in working class parlance, tips can come before or after the service is rendered, and are not dependent on the percentage of the fee either. Much like “signing bonuses” or “severance” terminology exists in professional realms to attract – or correctly dismiss – talent, tips are negotiable.
We also tend to think of tipping as completely discretionary, with the amount fully determined by the payer, yet the language currently says qualified tips may also be charged. Like a 20% tip can be added to the check at the discretion of a restaurant server just because you are a large party.
Don’t get me wrong, I like paying taxes for social programs, infrastructure, health care, national parks, libraries, and public education among other life-affirming things. And I feel that paying taxes in a truly democratic nation is a privilege. So I am not encouraging cheating in any way.
But if you can reclassify to realize more value when others are benefiting from the value you share, why wouldn’t you?
Sometimes a tax burden is a bit high, and the cost of living too. Another reason to use the tools you have.
Using the flexibility tipping creates can give the most skilled workers greater negotiating leverage, which raises up their families, and therefore also helps the greater economy. A win win.
How to tip it forward
If you categorize holiday gifts to your staff as “tips” instead of “bonuses”2 your gift could carry more value for your staff by being tax free. Not all professions will qualify, but this is worth looking into if you’d like to optimize how your gift can support your people’s lives.
Tipping as a mindful method of wealth-spreading can also mitigate the concerns the lower 75-90% of the economy is experiencing from this administration’s erratic dismantling of aid, re-working social programs, bad tariff games, f’ing around with things like health care coverage and social security, ICE raids, and other short-sighted policy moves.
We all know not everyone benefits equally from the stock market, tech booms, foreign investment, and real estate. Many folks choose to do their best work for the sake of public service, for the dignity of work itself, for their families, and for their community well-being. Or by calling. And these people matter.
From my most selfish lens
I am personally delighted that some of my work (as a content creator for myself and others) could perhaps fit this criteria. I’ve been struggling with how to receive income for content I feel could be/should be free, and tipping is an answer that may support me paying bills for the time being.
Like the brilliant, high-quality creative woman, Maria Popova (thank you Maria ❤️), who equates money with love, sometimes you just need to re-categorize how you receive things for your own peace of mind.
This new tax development will certainly help some of my friends in food service professions, and for that I am grateful. They deserve it.
For now, I’ll continue putting my digital art, experiments and findings, and web-weavings forth freely to support and empower creative people to do what’s needed and pay their bills too.
But how to charge “the public” has felt confounding, without roping friends into memberships or subscriptions, which have proven too costly for me to reciprocally sustain.
Annnnd, this community is amazing already – I consider you like fellow ambassadors of creativity, confidence, integrity, art and freedom. We do good work because we can.
I see you out there doing more and more good stuff, and trusting in your own creative dreams, and doing what matters most.
And ‘the public’ is to whom I’ve written for nearly three decades. And ‘the public’ is why I make digitally-displayed art without paywalls. It’s why I’ve run LitterProject.com at a loss for over 20 years3. This is also the reason I show up and vote, participate in government, support good organizations and businesses, and enjoy and share what I have. I know I’m very lucky.
My work is a calling, and my kids like expensive takeout pizza. So, I’m quietly accepting tips here. (Nothing like burying the CTA, right? See, I told you I still feel awkward about this.
Not sure about your situation, but more power to you if you rake in some huge tips this year… and even more you give them.
DISCLAIMER: This post is not financial advice. It is at best, social commentary. This post is my own opinion only, as I am an artist and writer with a BFA, tons of service experience, and self-taught digital marketing chops. Please see an accountant for proper tax advice, or ask AI and get some dribble that you have to double-check anyway.
- The doc has typos. File name indicates August 2025, but title on page says 2024. Perhaps it was hastily put together. ↩︎
- To be clear, I am not an accountant or tax specialist, so you should run your situation by a professional so as to comply with the law. I’m simply sharing easily verifiable information in hopes it helps your household. The Treasury.gov doc above is preliminary, so please revisit the final documentation on IRS.gov before you file. ↩︎
- Hey, some folks have expensive hobbies right? Like skiing or international travel. Mine is promoting positive social movements that cost nothing. Get a free bumper-sticker here if you like. ↩︎
