Breaking Down the “No Tax on Tips” Deduction

Belk on Business

Welcome back to Belk on Business! I’m Josh Belk, and I’m excited to get back behind the mic with you. In this episode, we kick off a new series exploring the impactful legislation passed earlier this month. Over the coming weeks, we’ll break down how it could affect your business, your wallet, and your financial strategies.

Today, we dive into three of the campaign promises that made it into the bill—focusing specifically on no tax on tips, deductibility of car loan interest, and the new provisions around no tax on Social Security. If you’re a business owner, self-employed, nearing retirement, or just curious about how these changes could affect your bottom line, you won’t want to miss this one.

3 Key Takeaways

• Not all tipped income is tax-free: Only certain occupations listed by the IRS (to be announced) will qualify for the tip income deduction—up to $25,000 for those under specific income thresholds.

• Car loan interest deduction comes with conditions: Only new, personal-use vehicles manufactured in the U.S. qualify for the $10,000 deduction—use a VIN decoder to verify eligibility.

• Social Security tax relief is limited: Individuals 65+ may deduct up to $6,000 of Social Security income, but standard state and income-level rules still apply.

Episode Timeline & Highlights

[0:00] - Kicking off a new podcast series and what’s coming in the next few weeks

[1:02] - Overview of today’s focus: no tax on tips, car loan interest deductions, and no tax on Social Security

[2:16] - Breaking down the “No Tax on Tips” deduction and who qualifies

[4:45] - Income limits and specific exclusions explained

[6:28] - Car loan interest deduction—what qualifies and how to verify your vehicle

[8:54] - New vs. used vehicle rules, commercial use exceptions, and documentation requirements

[9:41] - No tax on Social Security: who qualifies and how deductions apply

[10:51] - Why you still need to file in certain states—even with federal changes

Links & Resources

• IRS Occupation List for Tip Deductions (coming October)

• VIN Decoder for Vehicle Eligibility: https://vpic.nhtsa.dot.gov/decoder/
  

• IRS 199A Guidance: https://www.irs.gov/newsroom/section-199a-qualified-business-income-deduction
  

If this episode helped clear things up or sparked new questions, make sure to follow, rate, and review the podcast. And don’t forget to share it with a fellow business owner or friend who could benefit from these updates. Until next time—here’s to growing smarter!