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IRS.gov Website
Publication 17
taxmap/pub17/p17-030.htm#en_us_publink1000171380

Reporting Tips on Your Tax Return(p55)

rule
taxmap/pub17/p17-030.htm#en_us_publink1000171381

How to report tips.(p55)

rule
Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1.
taxmap/pub17/p17-030.htm#en_us_publink1000171382

What tips to report.(p55)

rule
You must report all tips you received in 2015 on your tax return, including both cash tips and noncash tips. Any tips you reported to your employer for 2015 are included in the wages shown on your Form W-2, box 1. 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 didn't report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later.
EIC
If you didn't keep a daily tip record as required and an amount is shown on your Form W-2, box 8, 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 on your Form W-2, box 1.
taxmap/pub17/p17-030.htm#en_us_publink1000171387

Example.(p55)

Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2015) on June 30 and received $10,000 in wages during the year. Ben 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 wasn't required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required.
Ben's Form W-2 from Blue Ocean 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_publink1000171388

Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer.(p55)

rule
If you received $20 or more in cash and charge tips in a month from any one job and didn't report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. To report these taxes, you must file Form 1040, Form 1040NR, 1040-PR, or 1040-SS (not Form 1040EZ or Form 1040A) even if you wouldn't otherwise have to file.
Use Form 4137 to figure social security and Medicare taxes and/or Form 8959 to figure Additional Medicare Tax. Enter the taxes on your return as instructed, and attach the completed Form 4137 and/or Form 8959 to your return.
EIC
If you're 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_publink1000171390

Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer.(p55)

rule
You may have uncollected taxes if your regular pay wasn't enough for your employer to withhold all the taxes you owe and you didn't give your employer enough money to pay the rest of the taxes. For more information, see Giving your employer money for taxes under Reporting Tips to Your Employer, earlier.
If your employer couldn't collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2015, the uncollected taxes will be shown on your Form W-2, box 12 (codes A and B). You must report these amounts as additional tax on your return. Unlike the uncollected portion of the regular (1.45%) Medicare tax, the uncollected Additional Medicare Tax isn't reported on your Form W-2.
To report these uncollected taxes, you must file Form 1040NR, 1040-PR, or 1040-SS (not Form 1040EZ or Form 1040A) even if you wouldn't otherwise have to file. You must report these taxes on Form 1040, line 62, or the corresponding line of Form 1040NR, 1040-PR, or 1040-SS (not Form 1040EZ or Form 1040A). See the instructions for these forms for exact reporting information.