Tips Deduction Estimator

Estimate your qualified tips and the allowed deduction for tax year 2025 (MAGI-based phaseout applied).

Estimated qualified tips

Deduction (before phaseout)

Final allowed deduction (after phaseout)

Phaseout: 0% based on MAGI

Filing statusModified AGI (MAGI)Tips reported in box 7 (W-2)Tips reported to employer (Forms 4070, optional)Unreported tips (Form 4137, optional)

Tips not reported to your employer but included as income (do not double count).

Other substantiated tips (self-employed logs, TPSO, etc.)

Summary

Employer-reported tips (W-2 Box 7 or Form 4070)

Unreported + other tips

Qualified tips (pre-cap)

Deduction cap

$25,000

Note: This calculator applies the MAGI-based phaseout for 2025 — phases from $150,000 to $200,000 for your filing status. The deduction cap ($25,000) is applied first, then reduced ratably across the phaseout range. These are federal-income deductions only; payroll taxes and state treatment may differ.

These calculators provide estimates for general planning and are for informational purposes only. They are not a substitute for professional tax advice; consult a qualified tax professional for guidance specific to your circumstances.