The recent passage of the "Big Beautiful Bill," including the "No Tax on Tips" provision, has prompted a mixed reaction among Nevada's tip workers, who are now evaluating the impact of the new tax changes signed into law by President Donald Trump on the Fourth of July. According to a report by FOX5 Vegas, Nevada tip workers can expect to see a tax deduction of up to $25,000 in tips, with taxes kicking in only after wages exceed $150,000 per spouse. However, this provision is set to expire in 2028.
In considering the bill's reach, the crucial role played by agencies like the Internal Revenue Service becomes apparent, tasked with implementing the bill's language. Certified Public Accountant, Kim Walker, expressed to FOX5 Vegas that "It is a game changer for the average tip earner," adding that "A large percentage of their taxable income now overnight becomes non-taxable." For single mothers and families with children, the benefits of this policy could be particularly pronounced, lifting a financial burden from their shoulders.
Conversely, the Culinary Union has taken a firmer stance, highlighting the need for permanent tax relief on tips. The union criticized the temporary nature of the worker tax relief, contrasting it with the permanent tax cuts for billionaires contained in the latest Reconciliation bill passed by Congress. The Culinary Union Secretary-Treasurer, Ted Pappageorge, was quoted in a statement obtained by 8 News Now as saying, "The Culinary Union supports tax relief for working-class tip earners." But he cautions that "Millions of Americans will also lose access to health care and essential economic programs."
The union's concerns extend beyond immediate tax breaks, touching on broader economic issues under the Trump administration. Pappageorge mentioned the adverse effects of current policies on consumer prices and tourism, both vital to Nevada's post-COVID recovery efforts. While warning against policies that could "destroy" the rebuilt economy, the Culinary Union promised to monitor the U.S. Treasury's regulation development to ensure promised benefits are realized for working-class taxpayers, as per 8 News Now.
Despite these concerns, some tax professionals are advising low-wage tip earners to reassess their W-4 and withholdings in light of the new law. Tracy Janssen of Symphony Business Services advised, via FOX5 Vegas, that workers should "Give your tax professionals a couple days to digest. There’s a lot of tax stuff in this bill. Then absolutely reach out before the end of the year to see how this is going to affect you and what adjustments you need to make."
