Thursday, August 07, 2025
Tip Deduction in the OBBB Act: What Business Owners Need to Know
You may have seen headlines buzzing about a “No Tax on Tips” provision in the newly passed One Big Beautiful Bill Act. As catchy as that phrase sounds, it’s not quite accurate. The legislation does not exempt all tip income from taxation. What it does provide is a limited but meaningful deduction for certain workers and a series of administrative hurdles for employers. Let’s break down what this new tip deduction is, how it works, and what business owners need to do now before it takes effect in
