So do twitch subs count as a tip, or just bits/cash donos
This thing has been rolled out pretty sloppily. It seems like things only count as tips if they’re given in cash or are accounted for in the new 1099s as tips. So it leaves some of the decision making to company lawyers to decide if it meets the law.
I suspect they will not count subs as tips even though they basically are. Many channels give you something in return, even if it’s just emotes or dodging ads
Now it will only be rethorical support, tho lots are actually supported by the war machine propaganda funds
spoiler
1. Beverage & food service
- Bartenders
- Wait Staff
- Food Servers, Non-restaurant
- Dining Room and Cafeteria Attendants and Bartender Helpers
- Chefs and Cooks
- Food Preparation Workers
- Fast Food and Counter Workers
- Dishwashers
- Host Staff, Restaurant, Lounge, and Coffee Shop
- Bakers
2. Entertainment & events
- Gambling Dealers
- Gambling Change Persons and Booth Cashiers
- Gambling Cage Workers
- Gambling and Sports Book Writers and Runners
- Dancers
- Musicians and Singers
- Disc Jockeys (except radio)
- Entertainers & performers
- Digital Content Creators
- Ushers, Lobby Attendants, and Ticket Takers
- Locker Room, Coatroom and Dressing Room Attendants
3. Hospitality & guest services
- Baggage Porters and Bellhops
- Concierges
- Hotel, Motel and Resort Desk Clerks
- Maids and Housekeeping Cleaners
4. Home Services
- Home Maintenance and Repair Workers
- Home Landscaping and Groundskeeping Workers
- Home Electricians
- Home Plumbers
- Home Heating/Air Conditioning Mechanics and Installers
- Home Appliance Installers and Repairers
- Home Cleaning Service Workers
- Locksmiths
- Roadside Assistance Workers
5. Personal services
- Personal Care and Service Workers
- Private Event Planners
- Private Event and Portrait Photographers
- Private Event Videographers
- Event Officiants
- Pet Caretakers
- Tutors
- Nannies and Babysitters
6. Personal appearance & wellness
- Skincare Specialists
- Massage Therapists
- Barbers, Hairdressers, Hairstylists, and Cosmetologists
- Shampooers
- Manicurists and Pedicurists
- Eyebrow Threading and Waxing Technicians
- Makeup Artists
- Exercise Trainers and Group Fitness Instructors
- Tattoo Artists and Piercers
- Tailors
- Shoe and Leather Workers and Repairers
7. Recreation & instruction
- Golf Caddies
- Self-Enrichment Teachers
- Recreational and Tour Pilots
- Tour Guides and Escorts
- Travel Guides
- Sports and Recreation Instructors
8. Transportation & delivery
- Parking and Valet Attendants
- Taxi and Rideshare Drivers and Chauffeurs
- Shuttle Drivers
- Goods Delivery People
- Personal Vehicle and Equipment Cleaners
- Private and Charter Bus Drivers
- Water Taxi Operators and Charter Boat Workers
- Rickshaw, Pedicab, and Carriage Drivers
- Home Movers
fucking lmao, everybody will be tip based servant?
Tutors
Goods Delivery People
Tailors
let me fucking tip my tutor, u haul driver and my theatre tailor for 1500$ costume
Everyone already is a servant, America has a service based economy. Only in industries that had particular circumstances around labor did tipping become normalized and in some cases, enshrined in law.
You don’t have to hand it to him, but no tax on tips is how trump comes out of the restaurant struggle session and it actually does materially improve the lives of people who get a significant amount of tips.
It’s not an ultimate solution for a lot of reasons but it’s a response to at least a plurality of the American workforce being servants, not a plan to transform them into servants.
It should shame every member of this website that I feel the need to append the following: this is not an endorsement of trump or the no tax on tips plan.
I mean, if (say) tutors tips are not taxable up to 150k (?), doesn’t it mean hiring them for min wage + tips (😉) becomes desirable for both employer and themselves, say instead of 20 bucks an hour to 7+10 untaxable would be a seeming win-win for both sides? lowering effective tax base to further cut welfare part of the state (or get inflation due to increased spending by upper quintile, cause they could hire more tip-based goons). There is now an incentive to relocate your income to tips
(not that everyone reports cash tips, but whatever, assuming goodie two shoes behavior)
Yes, it literally does incentivize that. Of course no one likes getting benefits taken from their pay that they’ll never use, which the majority of the welfare state in America is, but yes, it’s likely no tax on tips will cause a drop in receipts. What percentage of income with taxes deducted is tipped labor? What percentage of those deducted taxes are used on the welfare state?
I will leave that up to you because doing the math is illuminating.
The problem with the latter example of getting 20+ some smaller amount on top is that it works for edge cases but fails the biggest one where the tip is on a credit card and the recipient has to actually pay taxes on it no matter what because their cc processor has a big itemized batch that says how much money the recipient took in through them that they send out at tax time.
What actually makes tax free tips desirable for both parties is that now there is legal precident to treat all the enumerated tips as expensible and recorded. So now it’s not an eyebrow raising excercise for a forensic accountant to see receipts indicating $100 paid for services and $2000 paid as a tip for those services and every tippable job in the list is a micro money-laundering/slush fund distribution node.
Another strike against the latter is that a lot of states also have a lower rate than minimum that servers for example get paid if they exceed minimum in their tip out. So you have a normal week and break minimum for your tipout then you get like two bucks hourly paid by the restaurant and if you have a terrible off week and don’t break minimum in your tipout then that rate is required by law to rise to whatever brings you to minimum for that pay period. Restaurants under that setup are incentivized to collect and report all tips, even cash (although the good ones don’t) while the server is incentivized not to report cash tips. No tax on tips effectively makes it beneficial for all parties to report their tips, card and cash, because it decreases the chances that the restaurant has to pay state minimum and the server can claim higher income after taxes for all the things that need it (everything).
As I said before, you don’t have to hand it to him but no tax on tips is a real grappling with the economic reality of tipped labor in America. It’s not the right solution ™ but it’s not some cockamamie scheme.
As above so below:
This reply is not an endorsement or defense, it is an attempt to clarify.
but i’m more surprised by wild expansion of the categories, not that it’s not material good (if transitory). Say i’m goods delivery driver, i take fuel and amortization as a bill main part (to be deducted later), my wage as a tip, wouldn’t i basically be golden tax wise? or hairdresser, same for rent/utilities and real work?
Yes that’s the other part.
Business ownership in America is a way to avoid taxes and hide money, but you gotta actually recognize how to do it by looking at the math on the tax form or pay someone to do it for you (which fewer and fewer cpas will do anymore because a bunch of reasons) and not have goody two shoes brain.
The problem is that if you’re gonna push business ownership as the means to achieve class mobility then you need a lower class who will take advantage of those loopholes and we have spent billions of dollars educating kids to fear the carceral state and funneled anyone who can perform basic algebra into the stem -> engineering degree pipeline.
So there’s a massive amount of single entity llc havers who get befuddled by the math or stop at “boy, at least if I had a bunch of losses I’d be able to avoid taxes!”
So it also functions to give the dumb honest guys a break and trick otherwise perfectly functional soon to be Delaware corp havers into becoming dumb honest guys.
one man llc aside, can’t gig companies do billing shenanigans as well? “oh, your bill is split into two parts: 30% for our excellent work for finding you an uber driver and 70% tip”. Won’t help with fuel and whatever car miles, but still might significantly redistribute taxation load
The fact that no one reports cash tips means that this is a $25k deduction on card tips. Which means it could be an almost $30-40k deduction if you get a lot of cash.
Goods delivery people is for gig workers, the companies lobbied for it. Doordash, Spark, Amazon flex, etc.
but tipping your landlord is still taxed?!!?
Chefs and Cooks Food Preparation Workers
too bad it’s not up to us if we put up a tip jar in the dining hall, the corporation (lol just the dining director even) would be like “NO”
The ‘No Tax on Tips’ tax deduction is capped at $25,000 per year.
How does it interact with state and local taxes in the US?
You still have to pay state and local income tax on tips.
Not much incentive to report then, unless you need to prove it for a loan or something
Now a tax offset…
Ah, less space for full on shadow economy stuff. Where did I get 100k ballpark number from in my head:(
I think there’s a phase-out that happens around that level of total income maybe?
