No Tax on Tips: A Boon for Service Workers

Florida Congressman Byron Donalds has introduced the “No Tax on Tips Act,” aiming to ensure service workers retain all their tip earnings, a vital income source for many in the industry.

At 10 Twenty-Five in downtown Fort Myers, James Pires emphasizes the direct link between hard work and tips received, highlighting their significance to the community.

“I feel like I’ve earned that money through hard work,” Pires asserted.

However, despite their hard-earned nature, cash tips currently incur income taxes, with some establishments also deducting a percentage from each shift, a practice that leaves workers feeling disheartened.

Bartender Danielle Fagan expressed her frustration, feeling “robbed” despite relying heavily on tips due to minimal regular paychecks.

Congressman Byron Donalds’ proposed legislation, ‘The No Tax on Tips Act,’ seeks to change this by eliminating income tax on cash tips, offering a 100% deduction for tipped wages during tax filing.

“This bill allows taxpayers to claim a 100% above-the-line deduction at filing for tipped wages,” Donalds explained, underscoring its potential to prioritize the financial interests of hardworking Americans.

Workers interviewed by WINK News reporter Maddie Herron welcomed the proposal, anticipating financial relief and increased job appreciation.

“If the bill progresses and becomes law, it will apply to taxable years after the start of 2025,” signaling a potential shift in favor of service workers’ financial stability.

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