Here’s a Tip . . .

Earned income is taxable, so if you receive tips in your job, you should count those tips as part of your income. Even if grateful customers reward you with non-cash items, such as tickets or other items of value, you must declare the value of those items to the IRS as part of your income.If your tip income in a single month is greater than $20, you must also report that amount to your employer. Your employer will withhold income tax, Social Security tax, and Medicare tax on that amount. This process ensures you won’t owe a large amount due when you file your income taxes.Also, be sure to report all your tips. They may come to you directly from your customers, or as part of a credit card payment, or you may receive a share of the money from a tip-sharing agreement. If you need a handy way to keep a record, the IRS offers Publication 1244, which can be completed electronically.Need more tips? Watch for more right here—tax free! And if you need a CPA, reach us at Office@CPAsite.com or 904-396-5400.