skip navigation

Search Help
Navigation Help


Main Topics
A B C D E F G H I
J K L M N O P Q R
S T U V W X Y Z #


FAQs
Forms
Publications
Tax Topics


Comments
About Tax Map

previous page Previous Page: Publication 505 - Tax Withholding and Estimated Tax - Tax Withholding for 2009
next page Next Page: Publication 505 - Tax Withholding and Estimated Tax - Taxable Fringe Benefits
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p505-002.htm#en_us_publink10007265

Tips(p15)


rule
spacer

previous topic occurrence Income, Tip next topic occurrence

The tips you receive while working on your job are considered part of your pay. You must include your tips on your tax return on the same line as your regular pay. However, tax is not withheld directly from tip income, as it is from your regular pay. Nevertheless, your employer will take into account the tips you report when figuring how much to withhold from your regular pay.
taxmap/pubs/p505-002.htm#en_us_publink10007266

Reporting tips to your employer.(p15)


rule
spacer

If you receive tips of $20 or more in a month while working for any one employer, you must report to your employer the total amount of tips you receive on the job during the month. The report is due by the 10th day of the following month.
If you have more than one job, make a separate report to each employer. Report only the tips you received while working for that employer, and only if they total $20 or more for the month.
taxmap/pubs/p505-002.htm#en_us_publink10007267

How employer figures amount to withhold.(p15)


rule
spacer

The tips you report to your employer are counted as part of your income for the month you report them. Your employer can figure your withholding in either of two ways.
taxmap/pubs/p505-002.htm#en_us_publink10007268

Not enough pay to cover taxes.(p15)


rule
spacer

If your regular pay is not enough for your employer to withhold all the tax (including income tax, Medicare tax, and social security or railroad retirement tax) due on your pay plus your tips, you can give your employer money to cover the shortage.
If you do not give your employer money to cover the shortage, your employer first withholds as much Medicare tax and social security or railroad retirement tax as possible, up to the proper amount, and then withholds income tax up to the full amount of your pay. If not enough tax is withheld, you may have to pay estimated tax. When you file your return, you also may have to pay any Medicare tax and social security or railroad retirement tax your employer could not withhold.
taxmap/pubs/p505-002.htm#en_us_publink10007269

Tips not reported to your employer.(p15)


rule
spacer

On your tax return, you must report all the tips you receive during the year, even tips you do not report to your employer. Make sure you are having enough tax withheld, or are paying enough estimated tax (see chapter 2), to cover all your tip income.
taxmap/pubs/p505-002.htm#en_us_publink10007270

Allocated tips.(p15)


rule
spacer

If you work in a large establishment that serves food or beverages to customers, your employer may have to report an allocated amount of tips on your Form W-2.
Your employer should not withhold income tax, Medicare tax, and social security or railroad retirement tax on the allocated amount. Withholding is based only on your pay plus your reported tips. Your employer should refund to you any incorrectly withheld tax.
taxmap/pubs/p505-002.htm#en_us_publink10007271

More information.(p15)


rule
spacer

For more information on the reporting and withholding rules for tip income and on tip allocation, get Publication 531, Reporting Tip Income.
previous pagePrevious Page: Publication 505 - Tax Withholding and Estimated Tax - Tax Withholding for 2009
next pageNext Page: Publication 505 - Tax Withholding and Estimated Tax - Taxable Fringe Benefits
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication