The deduction may not exceed $25,000 a year
What the document says“The amount allowed as a deduction under this section for any taxable year shall not exceed $25,000.”
The section caps the deduction at $25,000 for a taxable year.
What the document actually says“The amount allowed as a deduction under this section for any taxable year shall not exceed $25,000.”
That sentence, in plain words
The deduction may not top $25,000. That is the cap for one tax year.
What this is about
Tips above that get no break. The cap does not grow with prices. It is fixed in the law.
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