Tattoo artists and piercers are a listed tipped occupation, so reported tips deduct from federal taxable income up to $25,000 per return, with or without itemizing, through 2028. In a cash-and-Venmo trade, the whole game is what got reported.
The shop model decides how it works. A commission artist paid as a W-2 employee deducts the tips shown on the wage statement. Most tattoo artists, though, are booth renters — self-employed, paying the shop a chair fee and keeping their own books. For them, card and app tips arrive mixed into a 1099-K, cash tips go on their own records, and the deduction caps at the net income of the business. Only reported tips count.
Watch the deposit trap: a non-refundable deposit applied to the piece price is service revenue, not a tip, and doesn't qualify. The gratuity a client adds after — that's the deductible tip, if reported. The deduction cuts income tax but not self-employment tax, and phases out above $150,000 ($300,000 joint). Booth renters are the most likely to have missed it in 2025, because software reads a 1099-K as undifferentiated shop revenue.