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Trump signed off on the no tax on tips deduction as part of his Big, Beautiful Bill legislation on July 4th. But, while the provision had bipartisan support, experts say not all workers who make tips will end up qualifying. In August, the U.S. Department of the Treasury released a preliminary list of the occupations that may be eligible. However, further guidance may be needed to determine who will actually qualify, as some jobs listed don’t meet the criteria laid out by the Trump administration. Regularly tipped workers who received tips on or before Dec. 31, 2024 are eligible, according to the legislation. According to the bill, some tip workers will be able to deduct up to $25,000 of “qualified tips,” which means “voluntary cash or charged tips received from customers or through tip sharing.” For those making over $150,000 ($300,000 for joint filers), the deduction will go down accordingly. But jobs that are “specified service trade or businesses” (SSTB) don’t qualify at all, according to the legislation. And, Ben Henry-Moreland, a certified financial planner with adviser platform Kitces.com, told CNBC, that, with the qualification in mind, the recent list could lead to confusion, as many “people will be surprised to find out that not every single occupation on [the Treasury list] is going to actually be eligible for the deduction.” According to TurboTax, an SSTB is a trade or business that relies on the skills or reputation of an employee. “If your business provides a service rather than a product, the business likely classifies as a SSTB,” the site explains. And, the number of jobs that fall under those categories are fairly plentiful, according to the Association of International Certified Professional Accountants, which may lead to a letdown for many come tax season. Which jobs are SSTBs? Healthcare workers, such as doctors, nurses, physical therapists, pharmacists, and even massage therapists, or other spa workers who earn a decent chunk of their income from tips. Legal workers, such as lawyers, paralegals, and mediators. Financial service workers, such as financial planners, investment bankers, retirement advisers, and more. Performers, such as artists, actors, directors, playwrights, and musicians. Athletics, such as professional athletes, team owners, or team managers. Businesses that earn income from endorsements or “use of an individual’s likeness, image, voice, etc.” or from making appearances. You can find a comprehensive list of specified service trade or business jobs here. According to the bill, the deadline for the list of occupations was published ahead of the October 2, 2025 deadline. The deduction will be effective from 2025 through 2026.
Category:
E-Commerce
The European Central Bank left interest rates unchanged Thursday with inflation back under control and the economy weathering Trumps tariff onslaught better than expected. The banks rate-setting council left its benchmark deposit rate unchanged at 2% at a meeting at its skyscraper headquarters in Frankfurt. The focus in Europe has shifted to the fiscal crisis in France and any possible role for the ECB in containing potential market turmoil that could erupt from the countrys out-of-control deficit and political logjam. Bank President Christine Lagarde said after the rate decision that monetary policy was in a good place and that decisions are being made meeting by meeting.” She gave no hint of future moves, saying the bank is not on a predetermined path.” The ECB is standing pat on interest rates even as the US Federal Reserve has held the door open for a possible cut at its Sept. 17 meeting. The 20 countries that use the euro currency and where the ECB sets rate policy showed 0.1% growth in the second quarter over the quarter before, not great but not sliding into outright recession either despite the disruption from U.S. President Donald Trumps new and higher tariffs. The S&P Global survey of purchasing managers, a key indicator of economic activity, came in at 51 in August, with readings over 50 indicating expansion. The EUs executive commission calmed the mood somewhat by negotiating a 15% ceiling on US tariffs, or import taxes, on European goods brought into the US. While thats far higher than pre-Trump tariff levels, Trump had threatened even higher rates and the deal gives some certainty that trade will continue, albeit with higher costs. “Trade uncertainty has clearly diminished, Lagarde said. The ECBs deposit rate influences borrowing costs throughout the economy. The ECB raised rates sharply to combat a burst of inflation in 2021-23, and has since lowered them as inflation came back under control and concerns grew about growth. Higher rates fight inflation but can slow growth, while lower rates can stimulate economic activity by making borrowing cheaper for purchases. Eurozone inflation was 2.1% in August, roughly in line with the banks target of 2%. With growth holding up, that means there was no great pressure to move rates Thursday. Analysts think another cut is possible in coming months. Lagarde was asked several times about the French government’s fiscal crisis. The French governments bond-market borrowing costs have risen somewhat due to the inability of a divided parliament to tackle the large deficit, which was 5.8% of GDP last year. In case of a full-blown market panic that sends rates higher, the ECB could intervene to purchase French bonds and drive down borrowing costs. But thats only possible for countries that are obeying the EUs rules on limiting debt or are moving to comply, which France at this point is not. Lagarde said the ECB’s emergency bond market backstop, dubbed the transmission protection instrument, was not discussed at the meeting and that the broader European bond market was functioning normally. Im not commenting on any particular country, but suffice to say that we always monitor market developments and euro area sovereign bonds are orderly and are functioning smoothly with good liquidity, she said. Analysts say the challenge for Lagarde is to avoid suggesting the ECB would bail out politicians who wont manage the governments finances properly, while not taking such a hard line that she unsettles bond markets. David McHugh, AP business writer
Category:
E-Commerce
Income inequality dipped, more people had college degrees, fewer people moved to a different home and the share of Asian and Hispanic residents increased in the United States last year, according to figures released Thursday by the U.S. Census Bureau. These year-to-year changes, big and small, from 2023 to 2024 were captured in the bureau’s data from the American Community Survey, the largest annual audit of American life. The survey of 3.5 million households asks about more than 40 topics, including income, housing costs, veterans status, computer use, commuting, and education. Here’s a look at how the United States changed last year. Income inequality dips Income inequality or the gap between the highest and lowest earners in the United States fell nationwide by nearly a half percent from 2023 to 2024, as median household income rose slightly, from $80,002 to $81,604. Five Midwestern states Iowa, Nebraska, Ohio, South Dakota and Wisconsin had statistically significant dips, along with Georgia, Massachusetts, New Jersey, Oregon and Puerto Rico. North Carolina was the only state to see a statistically significant rise in inequality. North Carolina State economist Michael Walden said it reflected the state generating high-paying jobs in tech and other professional sectors, while the post-pandemic labor shortage which raised wages in lower-paying service jobs had ended. In South Dakota, which had a leading 4% drop, the inequality dip could reflect stronger growth in the household income among lower and middle income households (or smaller growth in the income of the highest brackets), state demographer Weiwei Zhang said Wednesday in an email. In Nebraska, it could be high employment rates across all demographic groups since high employment leads to income, thus less income inequality, said Josie Schafer, director of the Center for Public Affairs Research at the University of Nebraska Omaha. In Massachusetts, one of the traditional strengths of the state’s economy high-paying jobs in life science, high tech and research has been sluggish in the past two years, said Mark Melnik, director of economic and public policy research at a University of Massachusetts Amherst institute. The typical jobs in this industry are the kind of thing that helps Massachusetts have the highest per capita (income) in the country but also exacerbates some elements of income inequality, Melnik said. Greater diversity and fewer people married The United States became more demographically diverse, and fewer people were married from 2023 to 2024. The non-Hispanic white population, who identify with only a single race, dropped from 57.1% to 56.3%, while the share of the nation’s Asian population rose from 6% to 6.3% and the Hispanic population rose from 19.4% to 20%. The rate of the Black population stayed the same at 12.1%, as did the American Indian Alaska Native alone population at 1%. In the marriage department, the share of men who have never married increased from 37.2% to 37.6%, and it rose from 31.6% to 32.1% for women. Fewer people moved, as costs of renting and owning homes rose Last year, only 11% of U.S. residents moved to another home, compared to 11.3% in the previous year. The decline of people moving this decade has been part of a continuous slide as home prices have skyrocketed in some metros and interest rates have gone up. In 2019, by comparison, 13.7% of U.S. residents moved. The monthly costs for U.S. homeowners with a mortgage rose to $2,035 from $1,960. Homeowners with a mortgage in California ($3,001), Hawaii ($2,937), New Jersey ($2,797), Massachusetts ($2,755), and the District of Columbia ($3,181) had the highest median monthly costs. Costs for renters also increased as the median rent with utilities went from $1,448 to $1,487. Mike Schneider, Associated Press
Category:
E-Commerce
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