For 1099

For 1099 Contractors:

Get Paid Fast. Stay Compliant. No Hassle.

For a 1099 worker, the federal tip tax deduction (up to $25,000/year) is available if your tips are reported on a Form 1099 (such as 1099-NEC or 1099-K) and the 1099 specifically indicates that the income is from a qualified tipped occupation. This is true even if you are not a W-2 employee.

• Advantages:

  • Accept digital tips anywhere—perfect for freelancers, gig workers, and solo professionals.

  • No app, no hardware, no cash—just a QR code.

  • Secure payments processed by Stripe.

  • Track all your tip income for easy tax reporting.

  • Transparent fees and instant access to your earnings.

• What You Need to Do:

  • Sign up and verify your account—takes just minutes.  You will receive a unique QR code.

  • Share your QR code with customers (digitally or you can make business cards or a printed sign).

  • Stay informed: Social Security, Medicare, and some state/local taxes may still apply, but federal income tax can be exempted for qualifying tips.

• What You Need to Do if you are an Independent:

  • Sign up as an independent worker—quick and free.

  • Get your QR code and start accepting tips immediately.

  • Track your earnings: Use KeepTips to see all your tips and download records for tax filing.

  • As an independent, you’ll report tip income on your annual tax return (Schedule C or similar). The federal tax exemption for tips applies only to tips reported through an employer and included on a W-2, but you still benefit from easy tracking and compliance. Note: The IRS and Treasury are expected to issue further guidance on exactly how independent contractors and business owners can claim any tip-related deduction, if at all. Until then, most tax professionals recommend not claiming the exemption unless your situation clearly fits the rules.

• What Deductions Can You Take as a Business Owner?

  • While you cannot claim the federal tip tax exemption currently, you can deduct many legitimate business expenses to reduce your taxable income, such as:

  • Home office deduction

  • Business supplies and equipment

  • Marketing and advertising costs

  • Health insurance premiums (if self-employed)

  • Car and travel expenses related to your business

  • Half of your self-employment tax

  • Qualified business income (QBI) deduction (up to 20% for eligible businesses)

  • Stay transparent: All payments are secure and documented for your peace of mind.

Why Choose KeepTips?

• No app to download, no cash needed, and no tax headaches.

• Fully compliant with IRS and federal guidelines.

• Designed for service workers to keep more of their hard-earned money.

Ready to get started? Sign up today and start receiving digital tips the smart way!