Table of Contents
-
Report your tips accurately to your employer,
-
Report your tips accurately on your tax return, and
-
Prove your tip income if your return is ever questioned.
-
Write information about your tips in a tip diary, or
-
Keep copies of documents that show your tips, such as restaurant bills and credit card charge slips.
![Sample Filled-in Form 4070A from Publication 1244](https://webarchive.library.unt.edu/eot2008/20081005005326im_/http://www.irs.gov/publications/images/15059v02.gif)
Please click here for the text description of the image.
Sample Filled-in Form 4070A from Publication 1244
-
Cash tips you get directly from customers or from other employees.
-
Tips from credit card charge customers that your employer pays you. (Also include tips from debit card charge customers.)
-
The value of any noncash tips you get, such as tickets, passes, or other items of value.
-
The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips.
Filled-in Form 4070
-
Your employer can withhold federal income tax and social security and Medicare taxes or railroad retirement tax,
-
Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and
-
You can avoid the penalty for not reporting tips to your employer (explained later).
-
Your name, address, and social security number.
-
Your employer's name, address, and business name (if it is different from your employer's name).
-
The month (or the dates of any shorter period) in which you received tips.
-
The total tips required to be reported for that period.
-
All taxes on your regular pay.
-
Social security and Medicare taxes or railroad retirement tax on your reported tips.
-
Federal, state, and local income taxes on your reported tips.
![Caution](https://webarchive.library.unt.edu/eot2008/20081005005326im_/http://www.irs.gov/publications/images/caution.gif)
Your employer may participate in the Tip Rate Determination and Education Program. The program was developed to help employees and employers understand and meet their tip reporting responsibilities.
There are two agreements under the program: the Tip Rate Determination Agreement (TRDA) and the Tip Reporting Alternative Commitment (TRAC). In addition, employers in the food and beverage industry may be able to get approval of an employer-designed EmTRAC program. For information on the EmTRAC program, see Notice 2001-1, which is on page 261 of Internal Revenue Bulletin 2001-2 at www.irs.gov/pub/irs-irbs/irb01-02.pdf.
If you are employed in the gaming industry, your employer may have a Gaming Industry Tip Compliance Agreement Program. See Revenue Procedure 2007-32, which is on page 1322 of Internal Revenue Bulletin No. 2007-22 at www.irs.gov/pub/irs-irbs/irb07-22.pdf.
If you are employed in the food and beverage industry, your employer may participate in an Attributed Tip Income Program (ATIP). See Revenue Procedure 2006-30, which is on page 110 of Internal Revenue Bulletin No. 2006-31 at www.irs.gov/pub/irs-irbs/irb06-31.pdf">www.irs.gov/pub/irs-irbs/irb06-31.pdf.
Your employer can provide you with a copy of any applicable agreement. To find out more about these agreements, visit www.irs.gov and type “restaurant tip reporting” in the Keyword search box. You may also call 1-800-829-4933 or visit www.irs.gov/localcontacts for the IRS Taxpayer Assistance Center in your area; or send an email to Tip.Program@irs.gov and request information on this program.
![Caution](https://webarchive.library.unt.edu/eot2008/20081005005326im_/http://www.irs.gov/publications/images/caution.gif)
![Caution](https://webarchive.library.unt.edu/eot2008/20081005005326im_/http://www.irs.gov/publications/images/caution.gif)
-
Cash and charge tips you received that totaled less than $20 for any month.
-
The value of noncash tips, such as tickets, passes, or other items of value.
Example.
John Allen began working at the Diamond Restaurant (his only employer in 2007) on June 30 and received $10,000 in wages during the year. John 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 was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. The sample filled-in forms on page 2 and page 3 show his daily tip record (Form 4070A) and his report to his employer (Form 4070) for October.
John's Form W-2 from Diamond Restaurant shows $17,000 ($10,000 wages + $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.
If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. They are not included in box 1 with your wages and reported tips. If box 8 is blank, this discussion does not apply to you.
-
You worked in a restaurant, cocktail lounge, or similar business that must allocate tips to employees,
-
The tips you reported to your employer were less than your share of 8% of food and drink sales, and
-
You did not participate in your employer's Attributed Tip Income Program (ATIP).
-
You kept a daily tip record, or other evidence that is as credible and as reliable as a daily tip record, as required under rules explained earlier.
-
Your tip record is incomplete, but it shows that your actual tips were more than the tips you reported to your employer plus the allocated tips.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
www.improveirs.org.
-
E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
-
Check the status of your 2007 refund. Click on Where's My Refund. Wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2007 tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
-
Download forms, instructions, and publications.
-
Order IRS products online.
-
Research your tax questions online.
-
Search publications online by topic or keyword.
-
View Internal Revenue Bulletins (IRBs) published in the last few years.
-
Figure your withholding allowances using the withholding calculator online at www.irs.gov/individuals.
-
Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant.
-
Sign up to receive local and national tax news by email.
-
Get information on starting and operating a small business.
-
Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You should receive your order within 10 days.
-
Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
-
Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
-
TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
-
TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
-
Refund information. To check the status of your 2007 refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2007 tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
Evaluating the quality of our telephone services. To ensure IRS representatives give accurate, courteous, and professional answers, we
use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to listen
in on or record random
telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
-
Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
-
Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No appointment is necessary, but if you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
-
Current-year forms, instructions, and publications.
-
Prior-year forms, instructions, and publications.
-
Bonus: Historical Tax Products DVD - Ships with the final release.
-
Tax Map: an electronic research tool and finding aid.
-
Tax law frequently asked questions.
-
Tax Topics from the IRS telephone response system.
-
Fill-in, print, and save features for most tax forms.
-
Internal Revenue Bulletins.
-
Toll-free and email technical support.
-
The CD which is released twice during the year.
- The first release will ship the beginning of January 2008.
- The final release will ship the beginning of March 2008.
Purchase the CD/DVD from National Technical Information Service (NTIS) at www.irs.gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5 handling fee). Price is subject to change.
-
Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
-
All the business tax forms, instructions, and publications needed to successfully manage a business.
-
Tax law changes for 2007.
-
Tax Map: an electronic research tool and finding aid.
-
Web links to various government agencies, business associations, and IRS organizations.
-
“Rate the Product” survey—your opportunity to suggest changes for future editions.
-
A site map of the CD to help you navigate the pages of the CD with ease.
-
An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes.
An updated version of this CD is available each year in early April. You can get a free copy by calling 1-800-829-3676 or by visiting www.irs.gov/smallbiz.
More Online Publications |