'No Tax On Tips' Includes Digital Creators, Too (hollywoodreporter.com) 61
"President Trump's One Big Beautiful Bill Act may have quietly changed the economics of the creator economy," reports the Hollywood Reporter. The Treasury Department has ruled this past week that digital creators, including podcasters, influencers, and streamers, qualify for the U.S. "no tax on tips" policy, allowing them to deduct tipped income up to $25,000. From the report: The change could cause digital creators to rethink how they seek income. Platforms like TikTok, YouTube, Twitch and Snapchat all offer a variety of ways for creators to generate income, be it a share of advertising revenue or creator funding programs, or options to launch subscription tiers for their channels or profiles. But they also give creators the option to turn on tips or gifts. If revenue from user tips or gifts is eligible, while recurring subscription revenue is not, it could shift how streamers, podcasters or influencers ask their followers to support them.
To be sure, there are limitations: The tax deduction is capped at $25,000 per year, and it begins to phase out at $150,000 in income for single filers and $300,000 for married joint filers. The act also provides that tips do not qualify for the deduction if they are received "in the course of certain specified trades or businesses -- including the fields of health, performing arts, and athletics," Treasury says, further limiting the deduction opportunity for some in entertainment-adjacent lines of work.
But by making influencers, Twitch streamers and podcasters eligible, the administration has nonetheless changed the incentive structure for digital creators, and the ramifications could be felt across the creator economy in the name of tax efficiency (Don't be surprised if users are asked to like, subscribe, and tip). Platforms may also develop more ways to more prominently feature tips and gifts, pushing creators to add more opportunities for that income. But the inclusion of digital creators is also a recognition of how the power dynamics have shifted in media.
To be sure, there are limitations: The tax deduction is capped at $25,000 per year, and it begins to phase out at $150,000 in income for single filers and $300,000 for married joint filers. The act also provides that tips do not qualify for the deduction if they are received "in the course of certain specified trades or businesses -- including the fields of health, performing arts, and athletics," Treasury says, further limiting the deduction opportunity for some in entertainment-adjacent lines of work.
But by making influencers, Twitch streamers and podcasters eligible, the administration has nonetheless changed the incentive structure for digital creators, and the ramifications could be felt across the creator economy in the name of tax efficiency (Don't be surprised if users are asked to like, subscribe, and tip). Platforms may also develop more ways to more prominently feature tips and gifts, pushing creators to add more opportunities for that income. But the inclusion of digital creators is also a recognition of how the power dynamics have shifted in media.
are they really tips as they take an 30% cut and t (Score:2)
are they really tips as they take an 30% cut and that is not allowed in tip pay jobs.
Re: (Score:3)
Q: What did the leper say to the hooker when he was paying her?
A: Keep the tip.
It's an old joke, but it checks out.
Re: (Score:2)
I believe it only counts as a tip if the customer specifically Pays it as a tip.
There are tipping services broadcasters can put up, Or they can accept payments directly at a Paypal account, and the only amounts taken out are a ~5% processing fee.
It is not clear if the other more expensive "gifting" features some of the platform sites offer would count as a legitimate tip,
because with those you are actually paying to the platform, and the paltform is just sharing a small percentage with their supplier.
Tip
Inquiring minds want to know.. (Score:5, Funny)
Re: (Score:1)
Will this change my tax exposure when providing 'gratuities' to supreme court justices?
Only if the annual total exceeds $25000. Wait... Clarence Thomas? Is that you?
Was there ever a time when podcasters didn't ask for people to like, subscribe, and tip? I'm not sure this changes a whole lot as there's a cap on how much in tips a podcaster can report as tax free, doesn't apply to high income earners (so supreme court justices would not likely get their tips tax free), doesn't apply to recurring subscription fees, and not to work paid for that is tangential to the podcast. I take that to me
Up to $25,000 (Score:3)
Re: (Score:2)
Bribes to politicians are already tax free as a business expense.
Re: (Score:2)
Only joke on the rich target? I was at least expecting some kind of obligatory joke about getting the entire shaft from the "just the tip" promise...
But I can't sustain the pretense of humor. I just don't have the right angle to see the humor in shooting themselves in the foot or in the wallet or wherever. Liars rulz stopped being funny a while back.
Is this joke funny yet?
Max YOB Time: Day 3742 of 4968
Presidential YOB Time: Day 3158 of 4384
Adjusted YOB Time: Day 1696 of 2922 (with time off for Biden behavior)
Countdown to Noon Jan 20, 2029: 1225d 23h 23m 37s
Re: (Score:2)
No, because they make more than $150,000. (The same limit applies to "no tax on overtime" as well - which many in the trades are PO'd about because a good tradesman will easily make much more than that - remember the Obama plumber making $250k/year?)
Though it might be interesting since many of the larger creators are owned by private equity (you probably know them - Veritassium is a huge one, but others like Donut, MenTou
I predict everyone will want tips now (Score:5, Insightful)
Pretty nice to get $25k tax-free every year, eh? I predict this will spread like weeds. Watch as lots of new jobs include tips in their compensation structures.
Believe me, I don't begrudge tipping people in service roles. They work hard for low wages, and deserve a boost. However, I have noticed that things are getting obnoxious. Many establishments already suggest tip amounts on the bill as percentages of the total including tax. Excuse me, but I don't tip the government.
And some of them brazenly suggest amounts that start well over 20% of the bill total. You'd have to be quite exceptional to deserve that amount on a regular basis.
I aim for 20% before tax, and rarely more.
Re:I predict everyone will want tips now (Score:4, Interesting)
This entire thing was always a scam to make it look like Trump was on the side of the working class while he is handing out trillions of taxpayer dollars to the 1,000 billionaires who run the show.
Oh and for what little you're going to get those tax cuts sunset in a few years.
Re: (Score:2)
No. That's one of the notable things about them... they concentrate a lot of wealth so they don't really scale.
Are you trying to suggest that billionaires don't exist? That's what this commentary format normally means, so I think maybe it's not the GP deluding themselves here.
Re: (Score:2)
That post isn't even from a human and it has no point. It is triggered as a response to a specific poster. And of course it isn't suggesting billionaires don't exist, who'd be paying for it?
Re: (Score:2)
Sometimes it is fun to hit a pinata with a stick until the candy comes out.
Re: (Score:3)
Of course for the last 50 years Republicans have also been the party of excessive debt. Turns out they were never actually walking that small government talk, were they?
Democrats are the party of handing out taxpayer money to voters to buy votes. Republicans are the party of smaller govt.
i love this conservative take on providing decent social services when our current government just handed a big fat reward to their affluent backers that the rest of the country will be paying for for eons as it's mostly financed by debt. Who cares both conservative and liberal economists were already almost universally saying our debt level
Re: (Score:3)
And yet, it was Musk who was openly offering money to people to get them to vote. Republicans only claim to be about smaller government and being fiscally responsible when they aren't in power, then push a lot of money to things...like ICE without any resistance.
Re: (Score:1)
LOL - dude I'd say you are trolling but you prove over and over again you are just a dope.
tax cuts don't really sunset. That is just one of the many political acts of theater that Washington engages in. They put in a sunset date, than everyone says see look the CBO score says it isnt to bad.
Shortly before whatever the sunset date is, there is a 'crisis' were "millions of americans will see their taxes jump way up, if congress does not act!"
Next the tax cuts are renewed, in some big giant budget bill nobod
Re: (Score:3)
"However, I have noticed that things are getting obnoxious. "
That's because you "don't begrudge tipping people in service roles", if indeed you don't. Tipping culture is absurd top to bottom, people should be paid a decent wage.
"I aim for 20% before tax, and rarely more."
You're part of the problem.
Where I live, if you want food actually delivered, a tip must be guaranteed of at least $10. When I was in college, I delivered food more than 20 hours a week, I usually got about $10 a week in tips, never $10 i
Re: (Score:2)
Speak for yourself.....
I worked in food service starting in High School (dishwater moved up to Busboy)....and off/on through grad school.
I waited tables and bartended, and I relished being a tipped employee.
I regularly made MUCH MORE than minimum wage wage with tips. If you have any people skills, you can make good bank for a job requirin
Re: (Score:2)
Re: (Score:2)
Tipping culture is absurd top to bottom, people should be paid a decent wage.
Tipping is great in good service jobs. You tend to make good money in mid-to-nicer restaurants as a waiter or waitress. Where tipping sucks is when you work in cheap joints with cheap customers. Or delivering pizza, like you did in college, where your customers tend to be either poor or cheapskates. Poor people can't afford to tip, and cheapskates simply won't. And then there are the groups that simply refuse to tip because they don't see labor or service as a value at all. "If I can't hold it in my hand,
Re: (Score:2)
When I was in college, I delivered food more than 20 hours a week, I usually got about $10 a week in tips, never $10 in a single night.
Presumably as an employee with the company paying the expenses. You wouldn't have been able to do this as an Independent for a tipping app for $10 a week --- I mean that your material costs as in gasoline at $3 a gallon plus the wear and tear on any vehicle would exceed the $10.
Re: (Score:3, Insightful)
Pretty nice to get $25k tax-free every year, eh?
You should rephrase that. "Pretty nice to not be taxed on part of your income labeled as Tips."
First, that only applies to your Tips, not your main income. If you received a basic salary and occasionally get additional tips, you might be able to flag your tips as non-taxable and not pay 12% tax on that amount, or about $3000 lower tax. If you earn above $150K the tips start getting moved into the taxable income with the benefit expiring when you reach $400K. By that time the tips are not the majority of
Re:I predict everyone will want tips now (Score:4, Insightful)
It's just an excuse for employers to pay below the cost of living, and then rely on tips to "motivate" the staff to work harder for them.
Re: (Score:1)
In the US, there is a tipped minimum wage.
I worked food service jobs from HS through grad schools....when working as a waiter and especially a bartender...I made bank through tips.
I made MUCH MUCH more than regular minimum wage.
I learned people skills too...which proved to be invaluable when I began work in professional "real" jobs....
Re: (Score:3)
It's okay if you live in an area where tips are decent, or if you are an attractive young woman/twink, but generally speaking having to rely on tips to earn a decent amount is discriminatory and works greatly in the employer's favour.
Re: (Score:1)
I worked in smallish cities in the southeast of the US...so, no major tipping capitals....and I"m an average looking guy I guess....
I found that a sense of humors and being outgoing and friendly did more than anything for tips...
Hell, there were a couple of times I dropped
Re: (Score:1)
Re: (Score:2)
Pretty nice to get $25k tax-free every year, eh? I predict this will spread like weeds. Watch as lots of new jobs include tips in their compensation structures.
Believe me, I don't begrudge tipping people in service roles. They work hard for low wages, and deserve a boost. However, I have noticed that things are getting obnoxious. Many establishments already suggest tip amounts on the bill as percentages of the total including tax. Excuse me, but I don't tip the government.
And some of them brazenly suggest amounts that start well over 20% of the bill total. You'd have to be quite exceptional to deserve that amount on a regular basis.
I aim for 20% before tax, and rarely more.
Not paying workers is exactly why tips were invented.
One of the reasons they're rejected in most other countries. You do the work, you get paid.
Tipping in the US came in after the Civil War when you had a bunch of freed slaves who the white people didn't want to pay, so they created jobs with no salary and let the employees keep the tips. It was a means of keeping the freed slaves servile hence tipping is customary in the US on menial service jobs, the only kinds of job that an uneducated black man in
Re: (Score:2)
Pretty nice to get $25k tax-free every year, eh? I predict this will spread like weeds. Watch as lots of new jobs include tips in their compensation structures.
Can we please re-classify our annual bonuses as "tips" from the company?
Re: (Score:2)
Believe me, I don't begrudge tipping people in service roles. They work hard for low wages, and deserve a boost.
I do. Pay the staff a decent wage, as part of the cost-of-business, and charge the customer the real price for their goods & services.
Tipping culture is just business owners being greedy and fucking over both their employees and their customers. I say this as a small business owner who pays my staff as best I can, and does not encourage tipping in my stores.
Re: (Score:2)
Pretty nice to get $25k tax-free every year, eh? I predict this will spread like weeds.
They are not deductible unless the specific job you are performing is in the list of customarily-tipped jobs.
Re: (Score:2)
I don't understand the need to incentivize "tipping" specifically; why are we even codifying it into law? Just increase the default deduction by 25k across the board. What makes that first 25k any different? Most people who genuinely need help aren't being tipped anyway. The only positive from the governments standpoint is less people might limit declaring their tips? Tips should go away, though, not be made more complicated and incentive given to companies to make them more ubiquitous than they already are
Read the fine print (Score:2)
Because of course they did. Trump gave 4 trillion dollars to the 1% and to do that he had to do all sorts of nasty things. He certainly couldn't give serious tax cuts to working people when you're handing out 4 trillion to about 1,000 billionaires. The math just doesn't math.
Re: (Score:3)
All of the tax on tip deductions or just that deductions and they cap out pretty quickly. They also sunset within a few years.
You're probably familiar with that delayed gratification experiment, right? That'd be the one where they took a classroom full of young kids and offered them the choice of a small bit of candy right now, or a bit more candy later if they could wait awhile. They then followed up with the kids as adults and the ones that chose to wait for the larger reward generally ended up being more successful.
Something tells me the typical sort of people who support Trump are only concerned with getting that little bit
Re: (Score:2)
How does your candy taste?
So.... (Score:2, Troll)
Instead of making sure the "business" is paying a living wage to those (undoubtedly American) citizens who work in these occupations, the government is telling them "ask not your employer for a salary, but the customer of your employer for a tip"?
Is it also customary in the Trumpistan when you want to return a defective item you bought online to make a deal with the customer support service employee on the phone instead of the shop?
The above (Score:3)
Mod above up. All this is is doubling down on a shit system where hardworking people have to depend on the generosity of others rather then get paid a decent wage
TIPS NEED TO DIE (Score:2)
This whole tip BS is to promote the tipping culture further when it needs to die like the RACISTS who promoted the whole thing into the culture.
It is along the same line of thinking of setting up donations as a replacement for health insurance. Or depending on private charities for welfare (so small it's almost a rounding error) or friends/family for unemployment support (for now, we still have unemployment insurance...Project 2028 should kill it...)
Republican Math. (Score:4, Insightful)
ALSO, what streamer or youtuber isn't in the performing arts? Does the term 'digital creator' now apply to everyone who uses a computer to produce things...?
What kind of accidental bait and switch are they pulling on themselves here? Are there still people who think that DOGE cheques are in the mail...?
Re: (Score:1)
They don't want those "nasty people" performing in drag to catch a break. I was blown away recently by a performance of "Proud Mary" (Tina Turner version) and that performer EARNED my $5. I say let them keep it!
Re: (Score:2)
I'm sure they're telling themselves other people understand their weird little internal conversation. Or not even thinking about it and taking it for granted. As normal.
Somehow they still get surprised when forcing religion in schools ends up with someone else's religion being included.
Re: (Score:2)
Here in Florida our Republican leadership painted over a whole bunch of art that had absolutely nothing to do with LGBTQ+ stuff. Either they're totally fine with the collateral damage in order to erase LGBTQ+ representation, or they're really not much into art either. So, I'm inclined to believe the exception for performing artists is because they're taking the term "liberal arts", literally.
"Bunch of radical liberal beatniks, the whole lot of 'em!" - some Republican who worked on that bill, probably.
Re: (Score:2)
Working hard to erase your partisan affiliation?
Does that include adult webcam entertainers? (Score:2)
Though I can't imagine anyone actually makes enough tip money on those "Wankurbate" type sites to actually have to report it on their taxes. Usually they're just sitting around looking super bored because no one is tipping (and in this economy, can you really blame 'em?).
Re: (Score:2)
Can you imagine the US Tax Office being like "yes, ma'am or sir... that qualifies as 'not performing arts' and also 'not athletics' as long as your heart rate stays below 120bpm at all times"?
Re: (Score:2)
I suspect you have quite an imagination when it comes to those sites, what you really mean is that you resent that anyone on those sites gets tipped.
"Usually they're just sitting around looking super bored because no one is tipping (and in this economy, can you really blame 'em?)."
And how do you know this?
We know Republicans like you visit these sites, then don't tip...because they're Republicans. That's not everybody.
Re: (Score:2)
I suspect you have quite an imagination when it comes to those sites, what you really mean is that you resent that anyone on those sites gets tipped.
Personally, I don't care what people do to earn a legal buck. I'm only pointing out that there's a rather wide disparity between the number of people who are willing to get naked on webcams and the number people who are willing to drop serious cash towards tipping them. This isn't even a phenomenon unique to adult content creators - everybody and their brother thinks they can make bank being some sort of "influencer", and most end up just shouting into a void.
And how do you know this?
Most of these types of adult cam sites allow a
Re: (Score:1)
Prediction (Score:2)
"How do you want it? Just the tip." is going to be really confusing for sex workers and their clients - regardless of who says which.
Fake it, Until you Fake it. (Score:2)
The act also provides that tips do not qualify for the deduction if they are received "in the course of certain specified trades or businesses -- including the fields of health, performing arts, and athletics,"
Uh, if there are already exemptions for the “performing arts”, what exactly are we pretending influencers/digital content creators are again?
The guy playing a doctor on the soap opera, is not “in” the medial business. He’s fucking performing. Same goes for the idiots on stream. Let’s stop pretending they’re not pretending already. No one claims the 15-year old kicking ass in CoD is some kind of bad-ass special forces operator IRL. Stop pretending “influen
Re: (Score:2)
For the purpose of law, a term like "performing arts" will have a legal definition. It doesn't matter whether that definition satisfies your intuition or not. It's yet another "copyright violations are not theft" argument, it means nothing.
"Same goes for the idiots on stream."
Prove it.
"They sure as hell are."
Many are, but they exist because originally they were not.
"It would make more sense to get rid of the performing arts exemption then to pretend certain jobs suddenly aren’t."
It would make most s
Re: (Score:2)
Does "no tax on tips" include strippers? (Score:2)