| Do you work at a hair salon, barber
shop, casino, golf course, hotel or
restaurant or drive a taxicab? The tip
income you receive as an employee from
those services is taxable income.
As taxable income, these tips are
subject to federal income, Social Security
and Medicare taxes, and may be subject to
state income tax as well.
You must keep a running daily log of
all your tip income. You can use IRS
Publication 1244, Employee's Daily Record
of Tips and Report of Tips to Employer, to
record your tip income. For a free copy of
Publication 1244, download it
from the "Forms and
Publications" section of this Web
site or call the IRS toll free at
1-800-TAX-FORM (1-800-829-3676).
If you receive $20 or more in tips in
any one month, you should report all your
tips to your employer. Your employer is
required to withhold federal income,
Social Security and Medicare taxes and to
report the correct amount of your earnings
to the Social Security Administration
(which affects your benefits when you
retire or if you become disabled, or your
family's benefits if you die).
For more information, check out IRS
Publication 531, Reporting Tip Income,
Publication 3148, Tips on Tips for
Employees, or Publication 3144, Tips on
Tips for Employer. They are available on
this Web site or by calling toll-free
1-800-829-3676. Also on this site is Tax
Topic 402, Tips. For recorded tax
information on tips, call the toll-free
TeleTax number, 1-800-829-4477, and select
topic 402.
Related Items:
-
Publication
1244, Employee's Daily Record of
Tips and Report of Tips to Employer
(PDF 38K)
-
-
-
|
