Category Archives: Planning for Your Financial Future & Retirement

What Can You Do With a 529 Account if Your Kids Decide Against College?

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As a parent or grandparent, you may have diligently saved money in a 529 account to help fund your child’s or grandchild’s college education. But what happens if they decide college isn’t the right path for them? It’s a valid question that many families are facing as more and more people choose alternatives to traditional four-year colleges.

It’s a more common situation than you might think. Fewer students are going to college, and the expenses continue to climb. American undergraduate enrollment rates peaked in 2010 and have steadily declined since. During the same period, the average costs of tuition and fees at a four-year public institution have risen by over 12 percent in inflation-adjusted dollars.1,2

A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. The state tax treatment of 529 accounts is only one factor to consider before committing to this savings plan. You should also consider any fees and expenses associated with a particular plan. Whether or not a state tax deduction is available will depend on your state of residence. State tax laws and treatment may vary, and state tax laws may differ from federal tax laws. Earnings on non-qualified distributions will be subject to income tax and a 10 percent federal penalty tax.

First and foremost, it’s important to remember that having a 529 account doesn’t mean that the funds are reserved only for a four-year college education. Several choices are available for using the money saved in the account.

One option is to use the funds for a two-year program, such as those for an associate’s degree or at a trade school. Many vocational schools offer programs that can lead to careers that don’t require a four-year degree. When you use the funds in a 529 account for these programs, you are still investing in your child’s or grandchild’s future and providing them with skills that may help them succeed.3

Another option is to use the funds for education expenses outside the United States. Many countries have educational institutions that offer programs that may interest the student in your life. By using the funds in a 529 account, you can help support their academic goals, no matter where they choose to pursue them. Certain restrictions apply, so you will need to explore this option more thoroughly if you decide to pursue it.3

The rules for 529 accounts allow paying up to $10,000 per year in tuition expenses at elementary, middle, or secondary schools with 529 assets. Furthermore, a lifetime maximum of up to $10,000 of 529 assets can repay existing student loans. So if the student doesn’t use the 529 plan, it could be used by a different beneficiary. This means that you can transfer the funds to another family member who may be preparing to attend college, or you might even use the funds for your education if you decide to return to school.3

A 529 account holder can move money to a Roth IRA account under certain conditions, including:3

  • The 529 plan must have been open for a minimum of 15 years.
  • Changing beneficiaries to another student may restart the 15-year clock.
  • The owner of the Roth IRA must be the beneficiary of the 529 plan (meaning the student).
  • Any money moved from a 529 plan into a Roth IRA account will be subject to the Roth IRA annual contribution limits. The Roth IRA contribution limit in 2025 is $7,000, with an extra $1,000 allowed for individuals over 50.
  • The lifetime limit is $35,000.

To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under other circumstances, such as the owner’s death. The original Roth IRA owner is not required to take minimum annual withdrawals.

It’s important to note that taking the money out of a 529 account for non-qualified expenses comes at a cost. Doing so may result in federal income taxes and a 10 percent penalty on the earnings portion of the withdrawal.

The truth is that for some young adults, college does not offer what they need. A person who aspires to enter a creative field might find more value in a vocational school or pursue their chosen field through smaller classes or institutes of learning. While most universities and colleges offer these courses, the cost involved could be a problem, as might the requirement to take courses beyond the student’s chosen field to earn a full degree.

In short, college is not for everyone. As you are guiding and advising the student in your life through these complicated decisions, it’s important to remember that a 529 account offers you a great deal of versatility and is designed with these variables in mind.

Remember that the funds in a 529 account can support the student’s educational goals no matter their path. By understanding how it functions and working with a financial professional, you will find that a 529 plan offers many potential opportunities.

Questions about this topic? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

  1. Education Data Initiative, December 21, 2024
  2. Collegeboard.com, 2024
  3. Schwab.com, June 14, 2024

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Social Security: Five Facts You Need to Know

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Social Security can be complicated, and as a result, many individuals don’t have a full understanding of the choices they may have. Here are five facts about Social Security that are important to keep in mind.

1. Social Security is a Critical Source of Retirement Income

Some have the perception that Social Security is of secondary importance in retirement. But according to a recent report by the Employee Benefits Research Institute, Social Security represents a major source of income for 66% of retirees.1

Keep in mind that Social Security makes annual cost-of-living adjustments (COLAs) based on the Consumer Price Index, and under current laws, pays income for life and the life of your spouse.2

2. You Can Choose When You Take Social Security

You have considerable flexibility regarding when you can begin receiving your benefits. You may begin receiving benefits as early as age 62; however, your benefits will be reduced at a rate of about one half of 1% for each month you begin taking Social Security before your full retirement age.3

The full retirement age is 67 if you were born in 1960 or later. If you were born before 1960, your retirement age will be reduced depending on the year in which you were born.

You may choose to delay receiving benefits until after reaching your full retirement age; in which case, your benefits are scheduled to increase by 8% annually. This increase under current law will be automatically added each month from the moment you reach full retirement age until you start taking benefits or reach age 70 – the age at which these delayed retirement credits stop accruing. Plus, your benefit also will increase by any cost-of-living adjustments applied to benefit payment levels during that time.4

If you intend to continue working, you may still receive the full benefit for which you are eligible. Working beyond full retirement age can increase your benefits. However, your benefits will be reduced if your earnings exceed certain limits. If you work and start receiving benefits before full retirement age, your benefits will be reduced by $1 for every $2 in earnings above the prevailing annual limit ($24,480 in 2026).5

If you continue to work during the year in which you attain full retirement age, your benefits will be reduced by $1 for every $3 in earnings over a different annual limit ($65,160 in 2026) until the month you reach full retirement age.5

Once you have attained full retirement age, you can keep working, and your benefits under current law will not be reduced regardless of how much you earn.5

3. Social Security May Be Taxable

Depending on your income level, your Social Security benefit may be subject to taxation. Your combined income (adjusted gross income + your non-taxable interest + one half of your Social Security benefit) can impact whether your Social Security retirement benefit is subject to taxation.6

This potential income tax exposure may have substantial implications for whether you choose to work during retirement, how your assets are invested, and the timing of withdrawals from other retirement accounts. For instance, a withdrawal from a traditional IRA may lift your income beyond the thresholds described above, subjecting a higher proportion of your Social Security to income tax.7,8

The same is true of investment earnings in non-retirement savings. Retirees who have investment earnings in excess of their current spending needs may be subjecting their Social Security income to taxation. Shifting a portion of those assets to a tax-deferred instrument may be one way to manage taxation on your Social Security benefit.9

4. Social Security Can Be a Family Benefit

When you start receiving Social Security, other family members may also be eligible for payments. A spouse (even if they did not have earned income) qualifies for benefits if they are age 62 or older – or at any age if they are caring for your child. (The child must be younger than 16 or disabled).

Benefits may also be paid to your unmarried children if they are younger than 18, between 18 and 19 and enrolled in a secondary school as a full-time student, or age 18 or older and severely disabled.

Each family member may be eligible for a monthly benefit that is up to half of your retirement (or disability) benefit amount. There is a family limit, which varies, but is generally between 150% to 188% of your retirement (or disability) benefit. Should you die, your family may be eligible for benefits based on your work record.10

Family members who qualify for benefits include:

  • A widow or widower
    • age 60 or older;
    • age 50 and older if disabled; or
    • any age if they are caring for your child who is younger than 16 or disabled and entitled to Social Security benefits on your record.
  • Unmarried children can receive benefits if they are:
    • under 18 years of age;
    • between 18 and 19 and are full-time students in a secondary school; or
    • age 18 or older and severely disabled (the disability must have started before age 22).

Your survivors receive a percentage of your basic Social Security benefit – usually in the range of 75% to 100% for each member. However, the limit paid to each family is about 150% to 188% of your benefit rate.10

5. A Divorced Spouse May Be Eligible for Benefits

If you are divorced, you may qualify for Social Security benefits based on your ex-spouse’s work record. To be eligible for benefits, your ex-spouse must have reached the age at which they are eligible to begin receiving benefits (although they do not necessarily need to be receiving them).10

To qualify, you need to:

  • have been married to your ex-spouse for at least 10 years;
  • have been divorced for two years or longer;
  • be at least 62 years old;
  • be unmarried; and
  • not be entitled to a higher Social Security benefit based on your own work history.

If your former spouse is deceased, you may still receive benefits as a surviving divorced spouse (irrespective of the age they died), assuming that your ex-spouse was entitled to Social Security benefits, your marriage was at least 10 years, you are at least 60 years old, and you are not entitled to a higher benefit amount based on your own work history. If you remarry before the age of 60, you will lose the ability to receive a survivor benefit from your deceased ex-spouse.10

If your former spouse is living, the maximum amount that you are eligible to receive is 50% of what your former spouse is due at full retirement age. To receive the maximum benefit, you will need to wait until you have reached your own full retirement age.10

Your benefits are unaffected should your former spouse elect to take Social Security before reaching full retirement age or if your ex-spouse starts a new family.10

Questions about Social Security? Contact First Financial’s Investment & Retirement Center

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

1. EBRI.org, 2025

2-6, 10. SSA.gov, 2025

7. In most circumstances, once you reach age 73, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). You may continue to make tax-deductible contributions to a Traditional IRA past age 70½ as long as you meet the earned-income requirement.

8. Once you reach age 73 you must begin taking required minimum distributions from a Traditional Individual Retirement Account in most circumstances. Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.

9. The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxed as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Estate Planning Steps to Protecting a Child with Disabilities

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If you’re a parent, you know raising a child is expensive. For a child with special needs, that cost can more than triple. If you’re the parent of a child with special needs, it’s vital to ensure your child will continue to be provided for after you’re gone. It can be difficult to contemplate, but with patience, love, and perseverance, a long-term strategy can be attainable.1,2

Envisioning a Life After You

Just as every child with special needs is unique, so too are the challenges families face when preparing for the long term. Think about the potential needs of your child. Will they require daily custodial care? Ongoing medical treatments? Will your child live alone or in a group home? Can family members assume some of the care? Answers to these and other questions can help form the vision of what may need to be done to plan for your child’s future care.

Preparing Your Estate

Without proper preparation, your child’s lifetime needs can quickly outstrip your funds. One resource is government benefits, such as Supplemental Security Income (SSI) and Medicaid, which your child may qualify for depending on their situation. Because such government programs have low-asset thresholds for qualification, you may also want to consider whether to make property transfers to your child with special needs.

You should also make sure you have an up-to-date will that reflects your wishes. Consider creating a special needs trust, the assets of which can be structured to fund your child’s care without disqualifying them from government assistance. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with these rules and regulations.

Involve the Family

All affected family members should be involved in the decision-making process. If at all possible, it’s best to have a unified front of surviving family members to care for your child after you’ve passed on.

Identify a Caregiver

In order for a caregiver to make financial and healthcare decisions after your child reaches adulthood, the caregiver must be appointed as a guardian. This can take time, so it’s a good idea to start setting this in motion as soon as you are able.

To do this, you can write a Letter of Intent to the caregiver and family to express your wishes along with information about your child’s care. This isn’t a legal document, but it will help communicate your desires in writing. Store this letter in a safe place, alongside your will.

Outlining an approach for a child with special needs can be complicated, but you don’t have to do it alone. Working with loved ones and qualified professionals can help you navigate the various facets of financial preparations for a child with disabilities.

Need some help with preparing your future financial plan? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

  1. Investopedia.com, December 14, 2023
  2. AmericanAdvocacyGroup.com, 2024

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Budget Check Up: Tax Time Is the Right Time

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Every year, about 140 million households file their federal tax returns. For many, the process involves digging through shoe boxes or manila folders full of receipts; gathering mortgage, retirement, and investment account statements; and relying on computer software to take advantage of every tax break the code permits.1

It seems a shame not to make the most of all that effort.

Tax preparation may be the only time of year when many households gather all their financial information in one place. That makes it a perfect time to take a critical look at how much money is coming in and where it’s all going. In other words, this is a great time to give the household budget a checkup.

Six Step Process

A thorough budget checkup involves six steps.

  1. Creating Some Categories. Start by dividing expenses into useful categories. Some possibilities: home, auto, food, household, debt, clothes, pets, entertainment, and charity. Don’t forget savings and investments. It may also be helpful to create subcategories. Housing, for example, can be divided into mortgage, taxes, insurance, utilities, and maintenance.
  2. Following the Money. Go through all the receipts and statements gathered to prepare your taxes and get a better understanding of where the money went last year. Track everything. Be as specific as possible, and don’t forget to account for the cost of any lattes on the way to the office each day.
  3. Projecting Expenses Forward. Knowing how much was spent per budget category can provide a useful template for projecting future expenses. Go through each category. Are expenses likely to rise in the coming year? If so, by how much? The results of this projection will form the basis of a budget for the coming year.
  4. Determining Expected Income. Add together all sources of income. Make sure to use net income.
  5. Doing the Math. It’s time for the moment of truth. Subtract projected expenses from expected income. If expenses exceed income, it may be necessary to consider changes. Prioritize categories and look to reduce those with the lowest importance until the budget is balanced.
  6. Sticking to It. If it’s not in the budget, don’t spend it. If it’s an emergency, make adjustments elsewhere.

Tax time can provide you with an excellent opportunity. You have a chance to give your household budget a thorough checkup. In taking control of your money, you may find you are able to devote more of it to the pursuit of your financial goals.

Need some help with preparing your future financial plan? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

  1. IRS.gov, 2025

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

8 Mistakes That Can Upend Your Retirement

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Pursuing your retirement dreams is challenging enough without making some common, and very avoidable, mistakes. Here are eight big mistakes to steer clear of, if possible.

  1. No Strategy. Yes, the biggest mistake is having no strategy at all. Without a strategy, you may have no goals, leaving you no way of knowing how you’ll get there—and if you’ve even arrived. Creating a strategy may increase your potential for success, both before and after retirement.
  2. Frequent Trading: Chasing “hot” investments often leads to despair. Create an asset allocation strategy that is properly diversified to reflect your objectives, risk tolerance, and time horizon; then make adjustments based on changes in your personal situation, not due to market ups and downs.1
  3. Not Maximizing Tax-Deferred Savings: Workers have tax-advantaged ways to save for retirement. Not participating in your employer’s 401(k) may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions.2
  4. Prioritizing College Funding over Retirement: Your kids’ college education is important, but you may not want to sacrifice your retirement for it. Remember, you can get loans and grants for college, but you can’t for your retirement.
  5. Overlooking Healthcare Costs: Extended care may be an expense that can undermine your financial strategy for retirement if you don’t prepare for it.
  6. Not Adjusting Your Investment Approach Well Before Retirement: The last thing your retirement portfolio can afford is a sharp fall in stock prices and a sustained bear market at the moment you’re ready to stop working. Consider adjusting your asset allocation in advance of tapping into your savings, so you’re not selling stocks when prices are depressed.3
  7. Retiring With Too Much Debt: If too much debt is bad when you’re making money, it can be deadly when you’re living in retirement. Consider managing or reducing your debt level before you retire.
  8. It’s Not Only About Money: Above all, a rewarding retirement requires good health – so maintain a healthy diet, exercise regularly, stay socially involved, and remain intellectually active.

Need some help with preparing your retirement strategy? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

  1. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation and diversification are approaches to help manage investment risk. Asset allocation and diversification do not guarantee against investment loss. Past performance does not guarantee future results.
  2. Under the SECURE Act, in most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty.
  3. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss. Past performance does not guarantee future results.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

No Tax on Tips Deduction Explained

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With the enactment of the One Big Beautiful Bill Act in July 2025, a new deduction for tips is effective for tax years 2025 through 2028. Here is a summary of the new provision and the occupations that will be affected.

Deduction explained

Employees and self-employed individuals may deduct up to $25,000 per year of qualified tips, provided they work in an occupation the IRS views as “customarily and regularly” receiving tips on or before December 31, 2024. This deduction is available to taxpayers whether they claim the standard deduction or itemize.

Qualified tips include voluntary cash or card payments, whether given directly by customers or through tip sharing. Tips must be voluntary and do not include automatic gratuities and mandatory service charges. For self-employed individuals, the deduction cannot exceed their net income (before applying the deduction) from the business in which the tips were earned.

Eligibility details

  • Taxpayers claiming the deduction must provide their Social Security number.
  • Married couples must file jointly.
  • Married couples filing separately are not eligible.
  • Workers in excluded fields, such as health, performing arts, or athletics (and their employees), are ineligible.
  • Employers must report tips and occupation details annually to the IRS or Social Security Administration and provide statements to workers.
  • The total amount of qualified tips that can be deducted per calendar year is $25,000 regardless of filing status.

Deduction limitations

The deduction begins to phase out for single filers with Modified Adjusted Gross Income (MAGI) over $150,000 or over $300,000 for married couples filing jointly. The deduction is reduced by $100 for every $1,000 above these thresholds.

Qualifying jobs

In October 2025, the U.S. Department of the Treasury and the IRS published proposed rules listing the industries and occupations that qualify for the deduction, because tipping was customary and regular in these jobs before December 31, 2024. Here are the qualifying industries with some of the most common qualifying occupations.

  • Beverage and food service: Bartenders, wait staff, baristas, bussers, cooks, dishwashers, hosts, and bakers
  • Entertainment and events: Casino dealers, musicians, DJs, performers, ushers, ticket takers, and digital content creators
  • Hospitality and guest services: Bellhops, concierges, hotel desk clerks, and housekeepers
  • Home services: Cleaners, plumbers, electricians, landscapers, HVAC repair workers, and locksmiths
  • Personal services: Nannies, babysitters, tutors, pet sitters, photographers, event planners, and personal caregivers
  • Personal appearance and wellness: Hairdressers, barbers, massage therapists, nail technicians, estheticians, and tattoo artists
  • Recreation and instruction: Golf caddies, tour guides, fitness instructors, self-enrichment teachers, and recreational pilots
  • Transportation and delivery: Valets, taxi/rideshare drivers, shuttle drivers, delivery workers, charter boat staff, car detailers, and home movers

A detailed list of occupations can be found on the website of the Federal Register.

Workers in up to 68 occupations could see their tax burden reduced by the “no tax on tips” deduction.

IRS transition relief

For tax year 2025, the IRS will provide transition relief in the form of further guidance or additional time for qualified taxpayers and employers to adapt to the new reporting requirements.

The “no tax on tips” deduction will likely affect many tipped workers in the hospitality, food service, personal care, delivery, and other industries. Both taxpayers and employers should stay updated on all reporting changes and compliance requirements.

Questions about this topic? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal professional.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

CRPC conferred by College for Financial Planning.

This communication is strictly intended for individuals residing in the state(s) of CT, DE, FL, GA, MA, NJ, NY, NC, OR, PA, SC, TN and VA. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Advisor Solutions Copyright 2025.