@Frustrated-in-IL is in Illinois; if his clients are, that's not a community property state.

I think the ownership question matters only if the payor is owned or partially owned by the payee.  What's important is who owns the pet, not who owns the business.

In my opinion, disallowing tips to self-employed people who don't receive 1099s comes under the "absurd result" rule of statutory construction that means the literal reading of Section 224(a) can be thrown out.  I'm taking the deduction for my self-employed clients who do personal-service work.  You do what you want with yours.  When Congress and/or Treasury clears this up, you can always file amended returns.