I have 2 jobs and one is a serving job. I have cash tips that i could claim but i was just told they wont affect my return. Is this correct? 18k is my box 1 and box 7 is 10k. I could easily add 5k in cash tips but im not sure if this is beneficial to my return. I also made ab 30k from my 9-5. Any help is appreciated.
Posted by Dunx10
12 Comments
It doesn’t matter if it’s beneficial or detrimental to your return; yes, you do have to report it as income. But your tax software will ask if any of your income is from tips or FLSA overtime, and you’ll answer yes. It’s taken as a deduction on line 13b.
If the tips weren’t reported to your employer and aren’t included in your W-2, you’ll owe some FICA tax that the new “no tax on tips” deduction won’t get you out of.
[https://www.irs.gov/newsroom/irs-published-schedule-taxpayers-will-use-to-claim-deductions-on-no-tax-on-tips-no-tax-on-overtime-no-tax-on-car-loans-no-tax-on-seniors](https://www.irs.gov/newsroom/irs-published-schedule-taxpayers-will-use-to-claim-deductions-on-no-tax-on-tips-no-tax-on-overtime-no-tax-on-car-loans-no-tax-on-seniors)
This isn’t the sub that’s going to tell you to do anything other than accurately report all your income.
Now that the whole internet knows you have 5k in cash tips, the IRS expects you to declare your cash tips too. 😜
You’re taxes are prepared based on the information you provide to your tax preparer. We will make no assumptions, though we may ask for additional information to provide clarification to allow us to prepare your most accurate return.
It should not impact your federal return, but many states are still standing by to take their share of those tips.
It’s not a question of what’s “beneficial to your return.” It’s what’s “accurate according to the tax code.” If you earned cash tips, you’re required to report those tips. That’s taxable income. It’s true, there is the No Tax On Tips deduction. That will zero out your tip income on the federal income tax side. But you still have to pay FICA and state tax on that income.
Did you not claim your tips at the end of each shift? When I was a server years ago, we had to manually add the credit card tips each shift and if it was a cash tip, you could add that as well. Those tips, plus my $2.13 hourly is what gets put on your W2. Did you not do that?
I believe you still owe social security tax, correct? So, you need to claim them in the social security tip section.
You are required to report your tips to your employer. That’s because your employer is required to play tax on them as well as you.
If you do that, then the tips will show up on your W-2 and you won’t have to add them separately.
If your employer declares it for you on the w4 then yes, if only credit card tips is then no. If your employer doesn’t see and know how much cash tips you make, and keeps track of it and puts it in your w4, then you shouldn’t file it. Keep that cash safeÂ
Hypothetically, if I was getting tipped in cash, I would not discuss it on Reddit, with the IRS, with my boss, with my co-workers, with Aunt Nelly, or with my cat.
I do not get tipped, cash or otherwise, in my job. When I tip my server, I do it in cash. Where that cash ends up is none of my business.