this post was submitted on 21 May 2025
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United States | News & Politics
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I'm noticing a weird tax cliff. Someone earning $149,999 (approximately; I didn't look up the exact amount) qualifies, and someone earning $150,001 is excluded entirely. So that mythical thing where earning more money can be worse for you, that is almost never a real thing.... it's actually a thing here.
That's kinda fucky, but idk how many people that could actually impact.
The especially dumb thing is this is for cash tips reported for taxation, so they can just underreport if/when they expect the limits to be an issue.
Plus the tax deduction cap is a hard value without any callout to the treasury department to modify the cap as inflation grows. So if we hit a hyperinflation scenario, a $25k cap won't mean shit. Congrats on getting a free hotdog's worth of tax writeoffs.
So the earning limit is indexed but the amount you can claim is not. Somehow half idiocy is much worse than full idiocy.