– Taxpayers should report all income from gig economy activities, including part-time, temporary, or side work, even if it’s paid in cash, property, or goods and not reported on an information return form.
– People working in service industries, such as restaurants and salons, should report all tips received, including cash tips and noncash tips of value, on their tax return. Cash tips must also be reported to the employer for inclusion on the employee’s Form W-2. 1. Employees must report any cash tips not reported to their employer on Form 4137 and include it as additional wages on their tax return.
2. Tip amounts of less than $20 per month per employer do not have to be reported, but larger amounts must be reported to the employer by the 10th of the following month.
3. Employees can report tips to their employer using Form 4070, an employer-provided form, or an electronic system used by their employer.
4. Taxpayers can find more information on reporting tips on the Tip Recordkeeping and Reporting page of IRS.gov.
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