Through 2028 you can deduct up to $25,000 of tips and $12,500 of overtime premium from your federal income tax. But the IRS wants a daily record, your employer needs your cash tips by the 10th of every month, and starting with tax year 2026 your W-2 carries the exact number they'll check you against.
Tender is the log that knows all three.
The 2025 law created two deductions and a paperwork trail nobody was taught. 2025 was a transition year — employers weren't required to break the numbers out. Tax year 2026 is the first one where they are, which means the return you file in early 2027 is the first one the IRS can match, line for line, against what your employer reported.
Deductible — but only voluntary tips, only net of what you tip out, and only in an occupation Treasury lists as customarily tipped. ~6 million tipped workers.
Only the FLSA premium — the "half" of time-and-a-half past 40 hours. Not the whole overtime check. 17 million filers are expected to claim it.
$20+ of cash tips in a month must be reported to your employer in writing by the 10th of the next month. Miss it: a penalty of 50% of the payroll tax owed — and the tips never reach your W-2.
Every one of these is in the statute or the IRS guidance. None of them is in the tip-tracking app you're using now.
You rang up $211 in card tips and handed $34 to the bar and the bussers. Deduct the $211 and you're claiming someone else's money. Tender subtracts it and shows the net.
The mandatory 18% on a party of eight is a service charge, and the IRS has treated it as wages since 2014. It's taxable and it is not a deductible tip. Your POS doesn't know the difference. Tender does.
You worked 46 hours at $11.50 and think a $1,200 overtime check is tax-free. The deductible part is the premium half: $34.50. Claim more and the return doesn't match the W-2.
Cash tips your employer never heard about aren't on your W-2 — and from 2026 the deduction is matched to the W-2. The most expensive paperwork in America takes three minutes a month.
Hours, cash, card, tip-out, service charges. That's the daily tip record the IRS asks every tipped worker to keep — and almost nobody does.
Net qualified tips against the $25,000 cap. The FLSA premium computed per workweek, per employer. The income phase-out. Married-filing-separately, which is excluded outright.
The year's daily record, and the monthly statement your employer is legally owed — with the numbers already in it. A screenshot persuades nobody. A dated table does.
| What you get | The other tip apps | Tender |
|---|---|---|
| Price | $4.99 a month, or ads every few seconds | $7.99, once |
| Knows the 2025–2028 deduction | No — they were built before it | It's the whole app |
| The 10th-of-the-month deadline | Never mentioned | Reminder + the statement to send |
| Overtime premium (the FLSA half) | Not computed | Per workweek, per employer |
| Your data | Their servers, their ad network | This phone. No account. No network permission at all. |
"Your tips already got taxed once.
They shouldn't have to pay rent to an app."
No subscription. No ads. Nothing to cancel.
Tender has no account, no server, no analytics and no ad network, and it asks for no network permission at all. Your shifts are written to your phone's storage and stay there. It stores no name, no Social Security number, no employer ID and no bank details — a workplace you typed, an occupation, an hourly rate, and what you made. Nobody, including us, can see what you earned.