IRS Publication 531
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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. |
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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. |
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