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"Many tipped workers don’t stand to take home more of their paycheck under the provision. Nearly 40% of tipped workers in the U.S. have incomes so low that they didn’t have to pay any federal income tax in 2022, according to the Yale Budget Lab.
'In order to get any benefit from a tax deduction, the way that they wrote this, you have to have tax liability to begin with,' said Ernie Tedeschi, the director of economics at the Yale Budget Lab. 'Only a tiny fraction of the American labor force would see a benefit.'
People making between $50,000 and $150,000 are most likely to benefit from the provision, Tedeschi said. But median annual wages for restaurant servers and taxi drivers — two of the most common tipped professions — are $31,940 and $34,680, respectively, according to the Bureau of Labor Statistics.
Tipped workers only make up a narrow slice of the workforce, Tedeschi added. Only 2.5% of U.S. workers, or 5% of the bottom 25% of earners, were tipped in 2023, the Yale Budget Lab found.
Still, tipped workers who do claim the deductions are likely to hit the $25,000 deduction cap quickly, Tedeschi predicted.
'The typical tipped worker in America sees 40% of their wages in the form of tips,' Tedeschi said. 'Even if you were a tipped worker that made enough money to have federal income-tax liability, you’d very quickly hit that cap.'"
Reasons You Might Be Selected For Additional TSA Screening At the Airport #travel #tips #news
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Think twice before exploring these cities on foot
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New Open-Source Tool Spotlight
Rudder is an open-source tool for automating system configuration while ensuring compliance in real-time. Its unique selling point? Policy-based management paired with detailed reporting, making it ideal for enterprise-scale environments. #DevOps #ConfigurationManagement
Project link on #GitHub
https://github.com/Normation/rudder
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