THE SAUGUS ADVOCATE – FriDAy, JAnUAry 30, 2026 Page 9 GARDENS | FROM PAGE 8 lands Day. Celebrated on this date since the 1990s, World Wetlands Day reminds people of the significance of wetlands and the need to protect them from destruction as a result of filling, pollution, development, etc. Rumney Marsh on the border of Saugus and Revere is a good example of a significant coastal wetland that was altered by development in the 20th century but saved from complete destruction. The best-known holiday that falls on February 2 is Groundhog Day. This would be a bad week for a groundGARDENS | SEE PAGE 13 NO TAX ON TIPS DEDUCTION A taxpayer can claim a federal income tax deduction for qualified tips received in calendar years 2025 through 2028, whether reported on a W-2 form or a Form 1099, or reported directly by the taxpayer on IRS Form 4137. This deduction cannot exceed $25,000 per tax year. However, the deduction is reduced by $100 for every $1,000 that the taxpayer’s modified adjusted gross income (MAGI) exceeds $150,000 ($300,000 for a married filing joint income tax return). This deduction phases out completely when MAGI reaches $400,000 for a single person or person filing as head of household and when MAGI reaches $550,000 for married taxpayers filing a joint tax return. If a taxpayer receives tips during the course of his or her trade or business, those tips are deductible only to the extent of the taxpayer’s net income from the trade or business. The net income is calculated without regard to the qualified tips deduction. Qualified tips are cash tips received by the taxpayer in an occupation that customarily received tips on or before December 31, 2024. The tips deduction can be claimed by a taxpayer on his or her tax return regardless of ing of the amounts reasonably designated as cash tips and the occupation of the taxpayer who received the tips. This requirement will therefore affect reporting on Form 1099-MISC, Form 1099-NEC and Form 1099-K. Tip income is still subject to the social security tax. The listed occupations fall whether or not he or she itemizes deductions or claims the standard deduction. The deduction is claimed on Schedule 1-A and is reported as a below-the-line deduction on Form 1040. This means the deduction is below the adjusted gross income line of Form 1040 and below the itemized deduction/standard deduction line of Form 1040. This deduction cannot be claimed by a taxpayer that is married but chooses to file married filing separately. Employers must report to the employee on form W-2 the total amount of cash tips reported by the employee to the employer and the occupation of the employee who received the tips. For a self-employed taxpayer, the business payer with the reporting requirement must provide the IRS and the taxpayer with a separate accountwithin eight broad occupational categories: hospitality and guest services, home services, personal services, personal appearance and wellness; recreation and instruction, transportation and delivery, and beverage and food service. Only qualified tips received in connection with the listed occupations are eligible for the deduction. This new provision that was contained in the Big Beautiful Bill stands to save a lot of federal income taxes for taxpayers receiving tip income. A single taxpayer in the 22% federal income tax bracket could stand to save as much as $5,500 if a $25,000 tip deduction is claimed. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a masters degree in taxation. Savvy Senior by Jim Miller When Do Most Americans Take Social Security? Dear Savvy Senior, What are the most popular ages that people start taking their Social Security retirement benefits? I’m turning 62 later this year and trying to decide when to start taking my benefits. Born in 64 Dear 64, You can sign up to begin your Social Security retirement benefits any time after age 62. However, your monthly payments will be larger for each month you delay claiming them up until age 70. This adds up to around 6 to 8 percent higher payments every year you delay. To get a breakdown on exactly how much your claiming age affects your benefits, visit Social Security’s Retirement Age Calculator at SSA.gov/benefits/retirement/planner/ageincrease.html. This tool provides your full retirement age (FRA) – which is 67 for anyone born in 1960 or later – and shows how much your benefits will be reduced by taking early payments or increased by delaying them. In the meantime, here’s a rundown of when people start receiving retirement benefits (according to the most recent SSA statistical data), and how signing up at each age impacts your payout. Age 62: This is the earliest possible age you can sign up for Social Security. According to the SSA, in 2024, 23.3 percent of women and 22 percent of men signed up for Social Security at 62. But if you sign up at this age, you’ll get a 30 percent smaller Social Security payment if your FRA is 67. Age 63: Age 63 is one of the least popular options for choosing to start Social Security benefits – 6.2 percent of men and 6.4 percent of women began claiming their benefits at this age in 2024. A worker with a FRA of 67 will get a 25 percent pay cut by signing up at this age. Age 64: This is another relatively unpopular age to begin collecting Social Security benefits – just 6.5 percent of men and 7 percent of women started collecting at age 64. Social Security payments are reduced by 20 percent for those with an FRA of 67. Age 65: In 2024, 15.3 percent of men and women decided to collect Social Security at age 65, which is also the enrollment age for Medicare. By starting at this age, you’ll see your monthly payments reduced by 13.3 percent if your FRA is 67. Age 66: This is FRA for people born between 1943 and 1954, which has made this a very popular age to begin collecting. In 2024, 27 percent of men and 25.3 percent of women sign up for benefits at 66. But since your FRA is 67, you’ll get a 6.7 percent pay cut if you sign up here. Age 67: People born in 1960 or later will be able to claim unreduced Social Security payments starting at this age. In 2024, 14.5 percent of men and 13 percent of women did this. Age 68: In 2024, 12.5 percent of men and 12.3 percent of women delayed their Social Security benefits until age 68. Waiting one extra year beyond your FRA of 67 will increase your benefit by 8 percent. Age 69: In 2024, 14.5 percent of men and 13.2 percent of women claimed their retirement benefits at 69, which increased their benefits by 16 percent. Age 70 and older: Waiting to age 70 offers the biggest possible payout – a 24 percent increase over your FRA of 67. In 2024, 8.4 percent of women and 9.1 percent of men held out until this age. Send your questions or comments to questions@savvysenior.org, or to Savvy Senior, P.O. Box 5443, Norman, OK 73070.
10 Publizr Home