Reporting Tips as Income
Perris Tax Service is reminding those who receive tips as a part of their wages that if it equals to $20 or more each month, you need to be reporting them to your employer. Your employer is required to withhold federal income, Medicare and Social Security from these wages.
The IRS has a form, Publication 1244, which is the Employer’s Daily Record of Tips and Report to Employer. This form is to keep track of all your cash, credit card tips, any tip you share with a fellow employee, and the value of non- cash tips. You must include this as gross income on your tax returns.
