What the New Law Means for Estheticians
Starting with 2025 tax returns (filed in 2026), estheticians (and other service professionals) will be able to deduct up to $25,000 in tips from their federal income taxes.
For solo spa owners, that could mean thousands of dollars in savings-money you can reinvest in supplies, education, or simply give yourself more breathing room.
But there’s a catch: you’ll need to track your tips cleanly and consistently to qualify.
Who Qualifies Under 'No Tax on Tips'?
According to the draft list of occupations, estheticians and other wellness professionals are included:
- Skin care specialists
- Massage therapists
- Makeup artists
- Hairdressers and cosmetologists
- Nail technicians
- Tattoo artists and more
This law applies to professions that “customarily and regularly receive tips,” and estheticians are clearly on the list.
Why Tip Tracking Will Matter More Than Ever
The IRS will want to see accurate records. That means scattered notebooks, Venmo, or cash boxes could make things messy.
The benefit is only as good as your records. Without clean tracking, you risk missing out on the deduction-or worse, facing compliance headaches.
Keep in mind: this change only affects federal income taxes. If you live in a state with income tax, tips may still be taxable at the state level.
How SpaSphere Helps Estheticians Stay Ready
- Automatic Tip Logging – Every tip is recorded directly within your booking and payment system.
- Exportable Reports – Generate clean records for tax season in one click.
- All-in-One View – No need to juggle multiple apps or paper records.
- Peace of Mind – Focus on your clients knowing your finances are handled in the background.
With SpaSphere, tips aren’t just income-they’re potential savings.
Pro Tips to Maximize Your Benefit
- Start tracking all tips digitally now, even before the law takes effect.
- Separate tips from service income in your records to keep things clear.
- Work with a tax professional who understands the new law and esthetician businesses.
- Use year-end reports from your booking software to simplify tax filing.
Final Thought
The new 'No Tax on Tips' law is more than tax relief-it’s recognition of the hard work estheticians put in, client by client, tip by tip.
With the right systems in place, this change could put thousands of dollars back in your pocket every year.
⚖️ Disclaimer
This article is for informational purposes only and does not constitute legal or tax advice. Tax laws can change, and how they apply to you may depend on your individual circumstances. Always consult with a qualified tax professional or accountant before making financial decisions for your spa.
SpaSphere makes tip tracking effortless-with automated payment logging, clean reports, and built-in compliance tools. So when 2025 tax season comes, you’re ready.
