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- Show All Tips on a Tax Return. Use Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to report the amount of any unreported tip income to include as additional wages. This includes the value of non-cash things someone receives as a tip, such as tickets or passes to an event.
- Report All Types of Tips. Taxpayers must pay tax on all tips received during the year, including those:
- Directly from customers.
- Added to credit cards.
- From a tip-splitting agreement with other employees.
- Report Tips to an Employer. Employees who receive $20 or more in tips in any month must report their tips for that month to their employer by the 10th day of the next month, including cash, check and credit card tips received. The employer must withhold federal income, Social Security and Medicare taxes on the reported tips.
- Keep a Daily Log of Tips. Use Publication 1244, Employee's Daily Record of Tips and Report to Employer, to record tips. This will help report the correct amount of tips on a tax return.
More Information: Tip Recordkeeping and Reporting Tax Topic 761, Tips – Withholding and Reporting Tax Publication 531, Reporting Tip Income Share this tip on social media -- #IRSTaxTip: IRS Offers Tips about Tips https://go.usa.gov/xQWZQ: Back to Top Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message. |
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