IRS Publication 531

AAA

DEFINITION of 'IRS Publication 531'

A document published by the Internal Revenue Service (IRS) that details how employees who have received tips as part of their compensation are to report that income for tax purposes. All tips received are subject to federal income tax, regardless of whether they are received directly from an employer or through a tip-sharing arrangement with other employees. Tips should be reported to the employer every month if more than $20 in tips have been received.

INVESTOPEDIA EXPLAINS 'IRS Publication 531'

Employees should use Form 4070A when reporting tips to an employer, which they can receive by requesting IRS Publication 1244 from the IRS or their employer. Publication 1244 contains a year's supply of Form 4070A.


Rules for tip income reporting are different than rules concerning reporting for bonuses and gambling.

RELATED TERMS
  1. Form 4070A: Employee's Daily Record ...

    A tax form distributed by the Internal Revenue Service (IRS) ...
  2. Tip Income

    Income that a service professional earns that is not part of ...
  3. Personal Income

    Total compensation received by an individual. Personal income ...
  4. Base Pay

    An employee's initial rate of compensation, excluding extra lump ...
  5. Smart Traveler Enrollment Program

    A service of the U.S. Department of State that lets U.S. citizens ...
  6. Back Pay

    The amount of salary and other benefits that an employee claims ...
RELATED FAQS
  1. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>
  2. Does the tradeoff model or the pecking order play a greater role in capital budgeting?

    The static trade-off theory and the pecking order theory are two financial principles that help a company choose its capital ... Read Full Answer >>
  3. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
  4. How important are contingent liabilities in an audit?

    Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >>
  5. What kinds of financial instruments are designated as “Securities” by Cabinet Order?

    In Japan, securities are regulated by the Diet and the Financial Services Agency, or FSA. Rulings about securities come down ... Read Full Answer >>
  6. How is money supply used in monetary policy?

    Regulating the money supply is the sole tool of the Federal Reserve's monetary policy. The Federal Reserve can affect the ... Read Full Answer >>
Related Articles
  1. Taxes

    How To Appeal Your IRS Audit

    The auditor's review isn't always the last word. Many taxpayers who are audited can successfully appeal their audits and save thousands of dollars.
  2. Taxes

    Uncle Sam's Surprise: Unexpected Sources Of Taxable Income

    When you get an unexpected check, don't be surprised when the tax man shows up to collect his share.
  3. Taxes

    Personal Income Tax Guide

    If the sight of your W-4 has you in the doldrums, read on to learn how to beat the tax blues.
  4. Taxes

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
  5. Economics

    Why Working Doesn't Add Up For Many Women

    A type of tax deduction for Japanese stay-at-home wives puts a barrier on women working full time in the country.
  6. Economics

    Chinese Opportunities For A Changing Child Policy

    China's one-child policy is changing, and investors are looking for ways to cash in. The reform might not have the effects that many anticipate, however.
  7. Taxes

    Tea Party Vs. Republican Party: Who Will Win In 2016?

    What agendas define the rift between the Tea Party and the Republican establishment, and which side will win the presidential nomination in 2016?
  8. Home & Auto

    What Are The Tax Advantages Of Buying A Home?

    Don't forget these deductions and credits that homeowners can use to reduce their tax bill.
  9. Taxes

    Corporate Tax Rates: The Highs and the Lows

    The United States is No. 2 in the world for its high corporate tax rate. There are ways around paying it, and many nations with lower rates are worse off.
  10. Taxes

    Understanding Income Tax

    Income tax is a levy many governments place on revenue of entities within their jurisdiction.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center