A Tip on Tip Reporting
If you are like millions of taxpayers in the service industry, you may receive tips. The tax code is clear; if you receive tips you must report them as income. Some employers have systems to make this easy, while others do not. Here are some suggestions:
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Proper tip reporting has three components.
- Keeping a daily tip record
- Reporting your tips to your employer
- Recording your tips on your income tax return