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Income Tax on Tips - Must-Know Information for Waiters & Waitresses

Updated on July 17, 2011

Filing income tax on tips when you're a waiter or waitress is a bit different from filing taxes on other jobs.

Income Tax on Tips

Income Tax on Tips - What You Need to Know
Income Tax on Tips - What You Need to Know | Source

Tip #1 - Keep Good Records

Keeping a record of your daily tips is important information when you work as a waiter or waitress. You should keep a daily record that includes cash tips you get from customers, tips you get from fellow employees when you do tip-sharing, and tips paid by credit card from customers.

Filing income tax on tips can get confusing, but by using a good form and keeping good records, it isn't that difficult. Copy and print out the "Tip Record Form" below. Get in the habit of filling it out daily and it will greatly simplify filing taxes.

This is also where good tax preparation software comes in handy. With software, you can simply type in your tips each day and it keeps a running total for you, ready to use at tax time.

Tip Record Form

 
 
 
 
 
Name:
 
 
 
 
Address:
 
 
 
 
Employer:
 
 
 
 
Restaurant:
 
 
 
 
Month/Year:
 
 
 
 
 
 
 
 
 
Date
Cash Tips Received From Customers
Credit Card Tips
Tips Paid to Other Employees
Employee Names
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Copy this form. Fill it out each month for your employer keeping a copy for yourself.

Tip #2 - Report All Tips

According to IRS rules, you have a 10-day period following the end of each month in which to report your tips to your employer. Your employer adds your tips to your regular salary and uses this information to figure up your social security tax, income tax, and Medicare tax.

Tip #3 - Get Your Deductions

Because you're a waiter or waitress, you may think you don't make enough of have enough deductions to file a long form when it comes to taxes. Talk to a tax preparer or use the best tax preparation software to make sure you claim every deduction legally allowed.

For example, if you're required to wear a uniform, you can claim the cost to buy the uniforms and cleaning of the uniforms as a deduction.

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    • Simone Smith profile image

      Simone Haruko Smith 6 years ago from San Francisco

      Thanks so much for the information and helpful form! It's a total hassle to have to record something like tips, but I'm glad you've shared how important it is to do so ^_^

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