Tips And Taxes - 2004-02-17
Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you collect as an employee from those services is taxable income, advises the IRS.
As taxable income, these tips are subject to federal income, Social Security and Medicare taxes, and may be subject to state income tax as well.
You must keep a running daily log of all your tip income. You can use IRS Publication 1244, "Employee's Daily Record of Tips and Report of Tips to Employer," to record your tip income.
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