Four Tax Tips for Tip Income
January 25th, 2012 . by adminHemet CPA is sharing these are four tips to follow if your wages include compensation from tips.
1.Tips are taxable if you make more than $20 in a month off of them. They are subject to be taxed on federal income, Social Security and Medicare.
2.Tips must be included in your gross income on your tax return. Tips received from customers as cash, additions to credit cards, shared tips with fellow employees, and the value of non-cash items received.
3.You employer must withhold taxes on these tips if more than $20 per month.
4.Use the IRS Publication 1244 to keep a running daily log of your tip earnings. You can download this form on the IS website, www.irs.gov.
