Are tour guides tips tax deductible in 2026?
Yes — tour guides are on the IRS tipped occupation list (code 704). Tips in this job are deductible for 2026, up to $25,000, if the customer chose the amount and could have declined.
Treasury Tipped Occupation Code 704 · Recreation and instruction · official title: Tour Guides
How tipping works in this job
The free-walking-tour model is tipping in its purest form: no price at all, and the guide is paid entirely by what the group decides to give at the end. Ticketed tours are tipped on top of the ticket, in cash at the finish. Guides working for operators are often tipped as an individual even where the ticket money never touches them.
The regulations say: Guide individuals or groups on sightseeing tours or through places of interest, such as industrial establishments, public buildings, and art galleries. Examples given: Museum guide, sightseeing guide.
The thing most likely to disqualify your tips
Where you guide a coach tour with a driver, the money handed over at the end is frequently one amount meant for both of you, and the qualifying figure is your share after the split. Operator-collected “gratuity” lines added to a package price are service charges, not tips.
Check your own numbers
Pre-filled for tour guides. Runs entirely in your browser — nothing is uploaded.
Step 1 — your occupation
Checking for Tour guides (Treasury code 704). This occupation is on the list.
Step 2 — is it actually a tip?
Answer for the money you are asking about. If some of your income is tips and some is service charges, run them separately.
Step 3 — your tips and income
The phase-out runs on modified AGI, which for most people is the same as AGI.
3 questions left to answer.
OBBBA Deductions · obbbadeductions.com
Tips deduction worksheet — tax year 2026
The three tests, as answered
- Does the customer decide the amount? not answered
- Can the customer decline to pay it? not answered
- Is it a mandatory service charge or auto-gratuity? not answered
Answer the 3 remaining questions above for a result.
Watch out for this in your job: Where you guide a coach tour with a driver, the money handed over at the end is frequently one amount meant for both of you, and the qualifying figure is your share after the split. Operator-collected “gratuity” lines added to a package price are service charges, not tips.
Educational estimate only, not tax advice. It runs entirely in your browser and nothing you type is sent anywhere. The deduction is scheduled to expire after tax year 2028.
How this applies to tour guides
Tour guiding contains the purest tipping model in the modern economy: the free walking tour, where there is no ticket price at all and the guide is paid entirely by what the group chooses to hand over at the end. Every dollar of it is voluntary, customer-determined and declinable, which makes it a textbook qualifying tip. It is also entirely cash, entirely unrecorded, and highly variable by group size, nationality and weather.
Ticketed tours work differently. The customer paid an operator for a ticket, and the tip is what they add at the finish. Here the risk is not classification but leakage: guides working for an operator sometimes receive a share of ticket revenue as well as tips, and the two arrive together. Ticket revenue is not a tip regardless of how it is split.
The specific thing to watch in this occupation is the operator-added gratuity. Coach tours, multi-stop packages and cruise excursions frequently build a fixed gratuity into the package price and remit it to the guiding team afterwards. Because the customer was billed a set amount they did not choose, it is a service charge, and it does not qualify even though it is called a gratuity on the booking confirmation and is paid to you specifically.
Where you guide alongside a driver, expect the group to hand over one amount meant for both of you. The qualifying figure is your share after the split you actually operate, not the total handed over. Museum and site guides sit in this same code and tip far more lightly than city walking guides — the pattern is closer to occasional appreciation than to a convention, so an annual figure built from a per-tour log will be much more accurate than a percentage rule of thumb.
The three tests, whatever your job
Paid voluntarily
The customer sets the amount and can decline to pay it.
Paid in cash or a cash equivalent
Card payments and mobile payments count.
Received directly or through a tip pool
Both routes qualify.
Questions
- Are tour guides on the IRS tipped occupation list?
- Yes. Tour Guides is Treasury Tipped Occupation Code 704, in the recreation and instruction category. The regulations describe it as: Guide individuals or groups on sightseeing tours or through places of interest, such as industrial establishments, public buildings, and art galleries.
- What is the most common reason tour guides lose the deduction?
- Where you guide a coach tour with a driver, the money handed over at the end is frequently one amount meant for both of you, and the qualifying figure is your share after the split. Operator-collected “gratuity” lines added to a package price are service charges, not tips.
- How much of my tips can I deduct?
- Up to $25,000 per return, whatever your filing status. The cap applies first, then the amount is reduced by $100 for every $1,000 of modified adjusted gross income above the threshold for your filing status.
- Does a mandatory service charge count as a tip?
- No. A mandatory service charge or automatic gratuity is not a qualifying tip, and the final regulations confirmed this explicitly. It does not qualify even when the customer cannot decline it — a qualifying tip has to be an amount the customer chose to give.
Related occupations in recreation and instruction
- 705
Travel guides
You plan and lead multi-day travel — expeditions, river trips, cruises and long tours.
- 706
Sports and recreation instructors
You teach a sport for recreation — skiing, surfing, diving, tennis — rather than for competition or certification.
- 701
Golf caddies
You caddie for golfers — carrying the bag, managing clubs and advising on club selection and strategy.
Occupation data transcribed from T.D. 10044 — final regulations on occupations that customarily and regularly received tips, Treas. Reg. § 1.224-1(h) table 1, last verified 2026-09-08. Read the regulations.