Tips are taxable income

SOUTHERN CALIFORNIA – If a person’s pay from their job includes tips, the IRS has a few important reminders about tip income: Tips are taxable.

Individuals must pay federal income tax on any tips they receive. The value of non-cash tips, such as tickets, passes, or other items of value are also subject to income tax.

A person needs to include all tips they have received during the year on their tax return. This includes tips received directly from customers, tips added to credit cards, and one’s share of tips received under a tip-splitting agreement with other employees.

Report tips to the employer. If a person receives $20 or more in cash tips in any one month, they must report their tips for that month to their employer. The employer is required to withhold federal income, Social Security and Medicare taxes on the reported tips. A daily log should be kept regarding tips.

For more information, see IRS Publication 1244 or Publication 531, Reporting Tip Income. Both are available at www.IRS.gov.

One Response to "Tips are taxable income"

  1. Leticia   April 7, 2013 at 12:16 am

    Still hoping you lotcae your brother and the rest of his family. His wife and her jaded past seems to had led your brother in a location of no return. Sadly it seems his wife and maybe the family is in some sort of danger (life/death situation) why else would anyone up and leave forever? If it was just the wife in this sort of danger, for your brother to leave as if he was in witness protection or something, willing to never speak or hear from his extended family he must love his wife and mother of the children very much. loyalty to an extreme! but at the cost of his children’s life and future? why not leave the children with trusted family members if the wife and or dad were in danger. Why keep the children running, what kind of life is that for them? Very selfish behaviour! Many questions, and have not thought or spoken of the alternative I don’t want to until evidence points in that direction. Keep broadcasting the story! Most people want to help, especially when it comes to innocent children! I feel like brainwashing techniques might have been used on the children, for nothing to have been brought to the publics attention as far as the children it is sad. Hopefully something will come up like a valid sighting, law enforcement or maybe even your brother! I will pray for you. All the best from our home to yours!

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