Cypress Tax Prep

01/26/2026

What is No Tax on Tips?

New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137.

“Qualified tips” are voluntary cash or charged tips received from customers or through tip sharing.

Maximum annual deduction is $25,000; for self-employed, deduction may not exceed the individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.

Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers. Self-employed individuals in a Specified Service Trade or Business (SSTB) under section 199A are not eligible. Employees whose employer is in an SSTB also are not eligible.

Taxpayers must:

Include their Social Security number on the return

File jointly if married, to claim the deduction

Reporting: Employers and other payors must file information returns with the IRS (or SSA) and furnish statements to taxpayers showing certain cash tips received and the occupation of the tip recipient.

Treasury and IRS provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and payors subject to the new reporting requirements.

01/26/2026

What is the Enhanced Deduction for Seniors?

New deduction: Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current additional standard deduction for seniors under existing law.

The $6,000 senior deduction is per eligible individual (i.e., $12,000 total for a married couple where both spouses qualify).
Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).

Qualifying taxpayers: To qualify for the additional deduction, a taxpayer must attain age 65 on or before the last day of the taxable year.

Taxpayers must include the Social Security Number of the qualifying individual(s) on the return, and file jointly if married, to claim the deduction.

12/16/2023

Now accepting new individual clients only (1040). Please go to www.cypresstaxprep.com for more information.

09/03/2023

Watch this video to find out what to do if you receive a letter that says the IRS is auditing your tax return by mail. For more information about audits, go ...

04/02/2023

Interest and penalties can pile up. If you owe taxes and can’t pay in full, it’s better to file and pay as much as you can by the due date on April 18 to minimize interest and penalties.

For more information, visit www.irs.gov/penalties

03/24/2023

Have tax questions? The Interactive Tax Assistant can point you in the right direction. This online tool lets you check if you’re able to deduct expenses, qualify for credits, and much more. Visit www.irs.gov/ita when you need help navigating your taxes.

06/16/2021

Office closed until September 1.

03/18/2021

If you did not receive your prior 2 stimulus checks (not this current one), let your tax preparer know. There are documents that can be added to your 2020 tax files to help.

09/10/2020

Reminder to everyone who extended their 2019 tax return, that the deadline is October 15, a little more than a month away! Time to pull and finalize those documents.

08/20/2020

: Important things all extension filers should remember.

Tax Tip 2020-106, August 20, 2020