Trump vows to do away with tax on tips.

There you go again...trying to make a dig as you always do. The term is erroneous used in the way you did and others do. At BEST the best you can surmise using that term tax deduction is some speculative tax benefit, at BEST. Yet you flippantly act like it is common practice, well for you folk I guess but I use the term as what it says...tax deduction, not taxable income reduction which is what YOU did and that cut/paste did, there is a big big difference.

So is the purpose of a write off to say that the write off is a deduction or is it to actually reduce taxes? A deduction is not a tax reduction unless it REDUCES TAX obligation, not that it reduces taxable income. I made that comment above but you as usual are stuck defending your position and trying to make a dig on me. 

What if a server (like MANY servers I know) do not take out federal taxes from their small min wage (like many I know did and do) does this "deduction" mean anything? Does it mean the same thing to someone in the upper bracket the 22% bracket as it does to those either lower or under the taxable bracket? Of course not.

That is why the Fido link I referenced is superior to your top line claim which means pretty much nothing...a taxpayer wants to know the TAX impact not the income reduction impact so when Fido referenced a tax financial figure that is the correct and appropriate way to explain a TAX deduction, printing what TAX impact it has on average not how much income is reduced on average as you did.

The superior and transparent way to explain the results would be to say on average no tax on tips REDUCED taxable income by an average of 7k, THAT is how you phrase it not the way your copy/paste did.

There is a reason why tax software in the upper corner lists Federal/State TAXES owed or refund, not taxable income. I dont know of any taxpayer that gives two craps about what their pre and post AGI number is but everyone IS concerned about their tax obligation and/or refund and for good reason.

You must not do your own taxes to be confused with what the term TAX deduction is versus taxable income reduction. It does not surprise me that the common person does not understand the nuance but someone of a high pedigree of education it does.

@wallstreetcappers

 It was not used erroneously.  They know the definition of it because it is their definition.
It is THE definition.

https://www.irs.gov/credits-and-deductions 

You can use credits and deductions to help lower your tax bill or increase your refund.

• Credits can reduce the amount of tax due.
• Deductions can reduce the amount of taxable income.

Credits and deductions are available for individuals and businesses.

Well, my taxes are much lower due to the Social Security deduction and I'm tipping more knowing a lot of it won't be taxed.

And democrat Gov Whittmer kept her promise (took a second term to get there) and Michigan no longer taxes retirees. Kudos to her for that one! 

Iran is doing their best to keep oil prices high. The fact they throw missles at any neighbor who works with the US is very telling. Wouldn't want them in the nuke manufacturing business.

Now, on those electricity prices. Did some research;

The best and worst states by rate cost and then what percentage of power from coal.

Ten Best rates by state. Percent of power from burning coal
1. North Dakota $11.64kwh. 53.1%
2. Nebraska. $11.79 45.6%
3. Missouri. $12.17. 63.8%
4. Idaho. $12.63. 15%
5. Arkansas. $12.73. 30.7%
6. Iowa. $12.74. 20.53%
7. Tennessee $12.82. 24%
8. Louisiana. $12.87. 7.6%
9. Oklahoma $12.89. 10.4%
10. Wyoming $13.04. 70%

TEN WORST BY STATE. Percent from burning coal
1. California $33.22. 0.12%
2. Maine. $32.17. 0.22%
3. Connecticut $30.77. 0.56%
4. Massachusetts $30.46. 0
5. New York $29.99. 0
6. Rhode Island $29.45. 0
7. New Hampshire $26.52. 1.2%
8. District of Columbia $23.97. 0
9. Vermont $23.27. 0
10. New Jersey $23.12. <2.0%

Now, I'm all for reducing coal burning. Texas made the news as their renewables were now a higher percentage than coal burned. Yet they still burn more coal than any other state. But they are, IMO, smartly transitioning and keeping rates just above $15 a kwh. Unlike the Top Ten Worst who just pulled the plug on coal and their residents suffer. Like New York State. Don't expect Trump to bail you out. 

@Raiders22

 It is like you do not read replies but that has been the case with you for a long time so this is no different.

I dont care if people use the term tax deduction to discuss the topic, no problem but it is inaccurate because to use the term without further final results is just flat stupid. So the way your guys said 7k (which is humorous when the max allowance is 25k but ok) says absolutely nothing as to the impact, the tax refund/obligation impact, it adds zero value to someone interested in finding out the true and only important issue at hand. Fidelity stated it properly to list the tax savings, the net figure not how much of an income deduction was taken. Who cares 7k income deduction, what is the tax impact? 

It is also funny seeing you try to weave in an actual TAX credit, that is exactly the point...a credit goes to the tax IMPACT where a deduction might it might not who cares about that? I think your copy/paste would have looked even more silly if you had listed the tax impact that whopping range of 0 to a max of 1400 and the OT impact of a less than many big boy truck tank fill ups lately.

You want to impact servers? Stop forwarding ACA destruction and let people have reasonable healthcare premiums and decent coverage, that is impactful not a few hundy in April on a tips scheme like this.

@UNIMAN

 More goes into that power number than you imagine...the top line number is not the cost to the utility. Down here we take excess supply needs from California even though this state should take advantage of the solar benefits our location provides and the seasonality which makes solar so great here but the utilities want control over demand so it will never happen.

The utility here provides the wholesale rate they pay for electricity it is public information and well known and wholesale here is probably a reasonable number for anywhere in the country. This year the wholesale cost for electricity went down 20% and the previous year about the same, wholesale is about 2 cents a watt a little less. The balance of the numbers you listed and wholesale is not about the method of energy production it is more about delivery costs, overhead and profit and whatever else the utility can toss in there like interest costs on debt they have or upgrade costs they pass on through retail rates.

Our utilities here are doing quite well paying about 2 cents a watt on average for the year and charging between 8 cents to 30 cents peak so more of the issue is about NON power costs than the wholesale rate which few understand they just know the retail cost users pay not the details as to why.

@wallstreetcappers

 I have explained to you already the impact was their returns were higher than the previous years.

This is the latest data:

Average tax refunds are 11.1% greater than last year, according to the IRS’ latest filing season statistics.

As of March 27, IRS filing season statistics show the agency had issued nearly 63 million refunds, with a cumulative total of $221.7 billion refunded. The cumulative refund amount was up 13.6% over 2025, while the average refund amount was up 11.1% over last year. On average, taxpayers are receiving $3,521 back this year.

Then you pooh-poohed that and say it is a drop in the bucket and minuscule.

That is ridiculous to do that.  Any tax savings that can help the folks that need it the most should be appreciated.

That is exactly what this tax bill from Trump did.  He ran on it and delivered on it.  Just be happy for those folks.

@wallstreetcappers

 I am still amazed that you did not understand that the distinction between a deduction and the actual savings.

I get that a lot of people get confused by that.

Then I thought maybe you simply mixed up a tax deduction with a tax credit because that does confuse a lot of people.

But I think you are intentionally trying to not understand this just to belittle the bill and the folks that benefited from it.

So, I want to give you a clear and concise differentiation:

• Gross income: $60,000
• Standard deduction already accounted for
• Taxable income before any new benefit: $50,000
• Federal tax owed: $5,000
• Taxes already withheld from paychecks: $6,000

Without any new deduction or credit:

• Tax owed: $5,000
• Taxes withheld: $6,000
• Refund: $1,000

A deduction reduces taxable income.

Before deduction:

• Taxable income: $50,000

After deduction:

• Taxable income: $43,000

Suppose this lowers the tax bill from $5,000 to $4,160.

Now:

• Tax owed: $4,160
• Taxes withheld: $6,000

Refund:

$6,000 - $4,160 = $1,840

• Taxable income fell by $7,000
• Tax bill fell by $840
• Refund increased by $840

Notice:

A $7,000 deduction did NOT increase the refund by $7,000.

A credit reduces the tax itself.

Taxable income stays:

$50,000

Tax before credit:

$5,000

Apply a $7,000 tax credit:

Tax becomes:

$5,000 - $7,000 = -$2,000

What happens next depends on whether the credit is refundable.

Tax can't go below zero.

Tax owed:

$0

Refund:

You get back your withholding:

$6,000

Tax becomes -$2,000.

Refund:

Withholding:

$6,000

Plus refundable credit:

$2,000

Total refund:

$8,000

Suppose you're in the 12% tax bracket.

Savings:

$7,000 × 12% = $840

Savings:

$7,000

@Raiders22

 #108 is exactly the point I try to make but someone has to read replies to get the point. My issue was that your initial cut/paste failed to list the impact just sloppy 7k tax deduction and as Ive said like 5x and you admit to in 108 that means literally nothing. 

If you were reading all my replies then why did it take you until #108 to finally get it? Maybe your cut/paste sources you actually pay attention to but someone who does not like your information delivery you tune out and ignore.

My fidelity link gave the data/info that means something, the taxable impact. A deduction reduces taxable income which I think I have stated more than plenty of times, who cares about the big fat useless 7k number (which is funny at 30% of the allowance) state the result and impact not a number which holds no value or relevance. And yes I do squash the silly scheme because the group your dood helped he also slammed with a bat with his project 2025 agenda and useless tariff inflation.

The deduction reduces the income that's taxed, while the credit reduces the tax you owe. This distinction is exactly why a headline like "average deduction of over $7,000" should not be interpreted as "average tax savings of over $7,000."

I am not sure how much simpler I can make this.  But I hope that clears it up a bit.

The same is true with other tax deductions and I am sure you understand they are not that amount in tax savings but that amount subtracted from your taxable income.

Like say, the standard deduction, the IRA Contribution, HSA, charitable donations, Itemized Mortgage Interest, SALT, or eve student loan deductions.

Now tax credits like EITC, Child Credit, LLC Credit, etc. are a totally different situation for taxes.

Then you get into the refundable and nonrefundable, etc.

But tax deductions are what most people should be familiar with and I honestly thought most people would realize this is NOT talking about their actual savings but changes their bracket and works with other deductions to reduce their taxable income.

That is why I thought the IRS website release on the data was pretty straightforward and easy to interpret. 

They pretty much laid it out step-by-step for the folks to see the results.

It is pretty much all there in succinct and concise black and white data.

@wallstreetcappers

 My issue was that your initial cut/paste failed to list the impact just sloppy 7k tax deduction and as Ive said like 5x and you admit to in 108 that means literally nothing. 

That CUT-AND-COPY was NOT to LIST the impact for each individual.  Everyone is unique on their taxes.

That data was just to present how the deductions were each used and the average amount that were used.

The impact can be seen by the increase in everyone's refunds.  Then if you want to parse out EXACTLY how much each deduction helped them then you can do that.

@wallstreetcappers

 My fidelity link gave the data/info that means something, the taxable impact

It explains what it is and how it would work and gives the same sorts of examples. 

It also is plain as day that the deduction amount is not the savings amount.

For example:

For certain workers, this deduction could add up to a lot of savings, explains Drew Bachman, director of financial solutions at Fidelity. "For example, a restaurant server in the 22% tax bracket who makes $20,000 in tips would save $4,400 in federal income taxes. That puts money back in their pocket they can then use to save for an emergency, buy essentials, pay bills or debt, or invest."

and:

As an example, let's say you earned $75,000 in total wages, $30,000 of which was from tips. You would list $75,000 as income and $25,000 (the maximum deductible amount) as a deduction. If, instead, $18,000 of your total income came from tips, you would enter $18,000 as the deduction.

Depending on other factors, this deduction will reduce eligible workers’ taxable income and possibly make them eligible for a tax refund.

So, I am not sure why you were having a hard time understanding this to start with.  Then when you realized what it was saying went to belittling the amount of money they actually saved on their taxes.

But at least you seem to understand that part now.

Now you can argue whether you think there should be higher taxes on those folks or not.  

But that is not my point in posting that data.  My point was simply that it worked as intended and the folks got more of their taxes back.

@Raiders22

 You cant make it more simple because Ive been saying the same thing for 20 messages to you who is not paying attention. If you want to keep repeating my words and using bold fonts and other peoples stuff from other sites go ahead but you are not saying anything Ive not said before you.

It wont matter if you repeat my words 50 more times it wont change the fact I already said it and you just keep saying my words again and again and again because obviously you are not actually reading my reply or you wouldnt just keep repeating my exact issues that I stated above over and over.

@wallstreetcappers

 Your numbers come from a source forwarding the agenda and not sure how you could calculate a no tips average savings of 7k

Those were your very first words.

The source is not agenda-driven.  It comes from their own data.  That is how they are able to calculate it.

This is where you said average savings of 7k.  

That is where this all started.  It is NOT an average savings; it WAS the average deduction claimed.

Wallstreet, I actually feel sorry for you, cause this guy will never admit hes wrong.

@cd329

 There is nothing to be wrong about.  I just presented the data.  Those folks used the deduction and saved on their taxes.

If many states had transitioned rather than shutdown their coal usage there would be less delivery charges and overhead to keep rates high. And no, what you have there for wholesale is not a reasonable number for the northeast.

And Arizona is diversified with natural gas, nuclear, coal, solar and wind. 

@UNIMAN

 No you did not read what I wrote I said the wholesale rate the utility spends is from California purchases, when AZ needs more supply they take from California we do not supply the full needs of the population. I also disagree about diversification as AZ is the top state in the country for solar and yet the utilities refuse to invest in the very asset we have the most of and that is because they do not want to give incentive for residents to install solar and take their game from them. If you think about it, residential solar solves a multiple of issues, supply and distribution cost. If my neighbor has an array and it produces more than they need the balance flows back to the grid and goes to the nearest source of need to their neighbor or business close by versus transferring from California or some remote area where an array is running for APS the utility. 

I did a AI check on state to state WHOLESALE electric rates and they vary per season but looks like wholesale for the east coast is in the 5-7 cent range depending on season. I think the retail rate is heavily influenced by non core product costs...more about delivery, overhead, debt etc so you cant blanket blame or credit coal when the wholesale cost is a fraction of the total cost.

@cd329

 Its not a big deal there is just a difference between a few of us and some people think that intimidation or deflection will put someone down but with me it wont and never has.