Tax Rules regarding Tips

Tax Rules regarding Tips

There are a few things you should know regarding your income tax return if you receive tips in your employment or job.

1. Report all of your tips on your income tax return.
2. All of your tips are taxable, including the tips you received from credit card transactions and tips you received from other co-workers under a tip-splitting arrangement.
3. Report your tips to your employer. If you receive $20 or more in tips in any one month, you must report your tips to your employer so that your employer can withhold taxes on the reported tips.
4. Keep a daily log of your tips. This will help you remember the amount of all of your tips when reporting the tips on your income tax return.

If you would like some help preparing your tax return, feel free to contact us at 816-524-4949 or Choorfar@Hoorfarlaw.com.