Online Tax Filing Blog

The Official Blog of Tax Software


Do I have to claim tips on my tax return?

Reporting your tip income correctly is not difficult. You must do three things.

1.       Keep a daily tip record.

2.       Report tips to your employer.

3.       Report all of your tips on your income tax return.


Keep a Daily Tip Record

It is important for you to keep a record of your daily tips, so you can report your tips accurately to your employer and on your tax return, and prove your tip income if your return is ever audited.

How to keep a daily tip record. There are two simple ways to keep a daily record. You can either:

·         Write information about your tips in a tip diary, or

·         Keep copies of document that show your tips

It is important to note that you do not need to write the amount of any service charge that your employer adds to a customer’s bill and then pays you and treats as wages, in your tip dairy. This is part of your wages, not a tip.


Report Tips To Your Employer

Why you should report your tips to your employer. You must report tips to your employer so that:

·         They can withhold federal income tax and social security and Medicare taxes

·       They can report the correct amount of your earning to the Social Security Administration, and

·         You can avoid the penalty for not reporting tips to your employer.


What tips to report. Report to your employer only, cash, check, and debit and credit card tips that you receive. If your total tips for any 1 month are less than $20, do not report the tips for that month to your employer.

If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive.


How to report.  If your employer does not give you any other way to report tips, you can use Form 4070. Fill in the information asked for on the form, sign and date the form, and give it to your employer.  If you do not use Form 4070, give your employer a statement with the following information every month.

·         Your name, address and social security number

·         Your employer’s name, address, and business name

·         The month in which you received tips

·         The total tips required to be reported for that period


When to report. Give your report for each month to your employer by the 10th of the next month.

What if I do not report my tips to my employer? 


Report All of Your Tips on Your Income Tax Return

How to report tips. Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1.

Comments are closed
Copyright © 2013 TaxSlayer LLC | 706-922-6741 | 3003 Allen Drive Evans, GA 30809
© 2013 Refund distribution subject to IRS acceptance of return & University National Bank. *IRS refund times will vary but most IRS refunds will be issued in less than 21 days after efiling. TaxSlayer cannot guarantee date of receipt of refund. Your Privacy is Important: We do not rent, sell or share your personal information with anyone. Your e-mail is used to communicate with you about your return status, retrieve your Username or reset your Password. *TaxSlayer phone support available January 2nd through April 19th. (C) 2013 JR Motorsports, LLC. The name, likeness and signature of Dale Earnhardt Jr are used with the permission of JR Motorsports, LLC and JRM Licensing, LLC.

*Free tax advice is available for free with TaxSlayer Premium Edition. This product is available by phone or email, Monday – Friday through April 15th. Please check the website for the hours of operation as they may vary due to capacity. * guarantees accurate calculations or we will reimburse you any Federal and/or State penalties and interest charges. *Maximum Refund Guarantee- Your refund is based on data supplied by you and is calculated based on the schedule and forms supported by A larger refund or smaller tax liability cannot be due to differences in data submitted to or positions taken that are contrary to law. If you find that another tax software calculated a larger refund or smaller tax liability based on the same information provided to, we will refund your applicable fees paid to *Actual prices for services rendered are determined at the time of print or efile and are subject to change without notice. Prices are good until April 1st 2013.

*All major forms and schedules: Your return is completed by all of the major forms and schedules supported by To see the complete list of major forms and schedules supported by visit *Supported Federal Forms page.
Go to top