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previous page Previous Page: Publication 17 - Your Federal Income Tax - Reporting Tips to Your Employer
next page Next Page: Publication 17 - Your Federal Income Tax - Allocated Tips
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pub17/p17-030.htm#en_us_publink100032579

Reporting Tips on Your Tax Return(p53)


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taxmap/pub17/p17-030.htm#en_us_publink100032580

How to report tips.(p53)


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Report your tips with your wages on line 1 of Form 1040EZ or line 7 of Form 1040A or Form 1040.
taxmap/pub17/p17-030.htm#en_us_publink100032581

What tips to report.(p53)


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You must report all tips you received in 2008 on your tax return, including both cash tips and noncash tips. Any tips you reported to your employer for 2008 are included in the wages shown in box 1 of your Form W-2. Add to the amount in box 1 only the tips you did not report to your employer.
EIC
If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security and Medicare taxes on tips not reported to your employer, later.
EIC
If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later.
If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2.
taxmap/pub17/p17-030.htm#en_us_publink100032584

Example.(p53)

John Allen began working at the Diamond Restaurant (his only employer in 2008) on June 30 and received $10,000 in wages during the year. John kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required.
John's Form W-2 from Diamond Restaurant shows $17,000 ($10,000 wages plus $7,000 reported tips) in box 1. He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return.
taxmap/pub17/p17-030.htm#en_us_publink100032585

Reporting social security and Medicare taxes on tips not reported to your employer.(p53)


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If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security and Medicare taxes on the unreported tips as additional tax on your return. To report these taxes, you must file a return even if you would not otherwise have to file. You must use Form 1040. (You cannot file Form 1040EZ or Form 1040A.)
Use Form 4137 to figure these taxes. Enter the tax on line 58, Form 1040, and attach Form 4137 to your return.
EIC
If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. To get railroad retirement credit, you must report tips to your employer.
taxmap/pub17/p17-030.htm#en_us_publink100032587

Reporting uncollected social security and Medicare taxes on tips.(p53)


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If your employer could not collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2008, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). You must report these amounts as additional tax on your return. You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes.
To report these uncollected taxes, you must file a return even if you would not otherwise have to file. You must use Form 1040. (You cannot file Form 1040EZ or Form 1040A.) Include the taxes in your total tax amount on line 61, and write "UT" and the total of the uncollected taxes on the dotted line next to line 61.
previous pagePrevious Page: Publication 17 - Your Federal Income Tax - Reporting Tips to Your Employer
next pageNext Page: Publication 17 - Your Federal Income Tax - Allocated Tips
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication