Tips Deduction Phase-Out Calculator 2026 ($150k / $300k MAGI)
Enter your income to see how the high-earner phase-out reduces your $25,000 tips deduction.
The No Tax on Tips deduction is capped at $25,000 and begins to phase out when modified adjusted gross income (MAGI) exceeds $150,000 for single filers or $300,000 for joint filers. It drops by $100 for every $1,000 of income above the threshold, so it's fully phased out around $400,000 (single) / $550,000 (MFJ). Enter your numbers below to see your result.
The tips deduction is generous — up to $25,000 — but it's aimed at working tipped earners, so Congress added an income phase-out for higher earners. The calculator below applies the exact formula: it caps your reported tips at $25,000, then reduces that amount by $100 for every full $1,000 your MAGI exceeds the threshold for your filing status.
MAGI here is close to your adjusted gross income. If you're not sure of your exact figure, enter your best estimate — the result updates instantly, so you can try a range.
Tips deduction phase-out calculator
How the phase-out math works
Suppose you're a single filer with $28,000 of reported tips and $165,000 of MAGI. First, your tips are capped at the $25,000 maximum. Then you're $15,000 over the $150,000 threshold — that's 15 full increments of $1,000, so the deduction is reduced by 15 × $100 = $1,500. Your allowed deduction is $25,000 − $1,500 = $23,500.
Because the reduction is $100 per $1,000, the full $25,000 deduction disappears once you're $250,000 over the threshold — roughly $400,000 MAGI for a single filer and $550,000 for a joint filer.
| MAGI | Amount over $150k | Reduction | Deduction kept |
|---|---|---|---|
| $150,000 | $0 | $0 | $25,000 |
| $175,000 | $25,000 | $2,500 | $22,500 |
| $200,000 | $50,000 | $5,000 | $20,000 |
| $300,000 | $150,000 | $15,000 | $10,000 |
| $400,000 | $250,000 | $25,000 | $0 |
Single vs. married filing jointly
The $25,000 cap is the same whether you file single or jointly — it does not double for couples. What changes is the phase-out threshold: joint filers get twice the runway ($300,000 vs. $150,000) before the reduction begins. If both spouses have tips, they share the single $25,000 cap on the return.
Frequently asked questions
At what income does the tips deduction phase out?
It starts phasing out at $150,000 of MAGI for single filers and $300,000 for married filing jointly. It's reduced by $100 for every $1,000 over that threshold, disappearing entirely around $400,000 (single) / $550,000 (joint).
Does the $25,000 cap double if I'm married?
No. The $25,000 maximum tips deduction is per return and does not double for joint filers. However, joint filers get a higher phase-out threshold ($300,000 instead of $150,000).
What income figure does the phase-out use?
It uses modified adjusted gross income (MAGI), which for most people is very close to adjusted gross income (AGI). The calculator lets you enter an estimate and see the result immediately.
Is the tips deduction available after 2026?
As enacted, the No Tax on Tips deduction applies to tax years 2025 and 2026. Whether it's extended beyond 2026 depends on future legislation. Verify current-year rules with the IRS before filing.
IRS sources & verification
Last reviewed July 12, 2026.