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Tip Income; How It Affects Your Taxes

4/6/2016

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To better serve our clients and friends, to keep you up-to-date and informed , here is IRS's Tax Tip on Tip Income; How It Affects Your Taxes

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If you get income from tips, you should know some things about tips and taxes. Here are a few tips from the IRS to help you file and report your tip income correctly:
  • Show all tips on your return. You must report tip income. This includes the value of non-cash tips such as tickets, passes or other items.
  • All tips are taxable. You must pay tax on all tips you received during the year. This includes tips directly from customers and tips added to credit cards. This also includes your share of tips received from a tip-splitting agreement with other employees. 
  • Report tips to your employer. If you receive $20 or more in any one month, you must report your tips for that month to your employer by the 10th day of the next month. Only include cash and check and credit card tips you received. Your 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 your tips. This will help you report the correct amount of tips on your tax return.
For more on this topic, see Publication 531, Reporting Tip Income. You can get it on IRS.gov.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

https://content.govdelivery.com/accounts/USIRS/bulletins/14098a1?reqfrom=share

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicago land area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Art Bradley CPA & Janice Papais CPA 
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
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Phone: (630) 320-3720

Monarch Accounting Group Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527-7836
Email: Info@MonarchAccountingGroup.com


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  • Home
  • Solutions
    • CFO Services
    • Cloud ACCOUNTING
    • Bookkeeping Services
    • QuickBooks Training
    • Income Taxes
    • Other Services
  • Resources
    • Tax Rates
    • SmartVault
    • Tax Tips
    • Tax Organizer
    • Record Retention Schedule
  • Reviews
  • Meet Us
  • Blog
  • Contact Us