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Frequently Asked Tax Questions

Interest/Dividends/Other Types of Income - Tips

  1. Of my allocated tips, I tip-out 15% to the busboy and 5% to the bar. Where do I deduct this on my tax return?

Rev. date: 1/1/2011

Of my allocated tips, I tip-out 15% to the busboy and 5% to the bar. Where do I deduct this on my tax return?

You cannot deduct tip-outs (the tips you split with other employees) on your tax return. Nor can you deduct them from your allocated tips:
Tipping-out, by itself, should not cause an allocated tip situation: