In the world of politics, “big and beautiful” is usually reserved for hotels, walls, and hand gestures. But now? It’s tax policy. Former President Trump has thrown a new campaign promise on the grill: The No Tax on TIPS Act (HR482) — a spicy proposal to eliminate federal income tax on tips for service workers.
Cue the standing ovation from bartenders, baristas, and anyone who’s ever said “Have a blessed day” for 20% gratuity.
If passed, this bill could completely reshape how tipped workers view (and report) their income. No federal tax on those tips? That’s like discovering guac isn’t extra.
Expect employees to suddenly start reporting those elusive cash tips they used to conveniently forget—especially if it makes their paycheck look prettier for that mortgage app.
More honesty = higher wages reported = better loan eligibility = happier staff = fewer “I’m quitting to become an influencer” speeches.
Win-win… right?
Here’s the part the confetti cannon didn’t mention: employers still owe payroll taxes on those now tax-free tips.
Yep. If your team is now gleefully reporting every crumpled dollar bill they earned last Friday night, you’ll be footing a larger share of the tax tab.
So while the IRS gives employees a break, you could be coughing up more in matching contributions. It’s like splitting the check at dinner, except your name is on every line item—and no one ordered the lobster but you’re still paying for it.
Before you whip out the label maker and start slapping “TIP US!” on every professional invoice, slow your roll. The bill limits this benefit to occupations traditionally tipped before December 31, 2023.
So unless your law firm started accepting Venmo tips at the Christmas party, you’re likely out of luck. (And yes, we’re crushed too.)
We’re still waiting on the Treasury Department to drop the official list of tip-worthy professions—but don’t hold your breath if you work in tech support or real estate closings.
Here’s the deal: whether this bill passes or not, you need to prepare. The team at Calculated Moves recommends you:
Because if this law passes and it's retroactive (like some lawmakers are suggesting), you’ll want clean records faster than you can say “Schedule C.”
Let’s face it—running a business already feels like piloting a boat through a storm with a broken compass, one oar, and your mother-in-law shouting suggestions from the shore.
That’s why we exist.
At Calculated Moves, we’re not just tax experts—we’re your Small Business Growth Strategists. We help family businesses, reinvention entrepreneurs, and overworked owners like you make more money, pay less tax, and outsource the chaos that comes with financial planning.
Because you've got better things to do than untangle IRS riddles or wonder if your barista's pay stub is going to bankrupt you.
We’re watching this legislation closely. While it could be a gamechanger for employee morale, it might also be a hidden landmine for your payroll expenses.
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Donna Bordeaux, CPA with Calculated Moves
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.