The federal basics
They are subject to federal income tax and generally to Social Security and Medicare taxes.
Federal guidance generally asks employees to keep a daily tip record, report cash tips to the employer unless the monthly total from that employer is below the applicable threshold, and report all tips on the federal income tax return.
What the IRS treats as cash tips
Cash tips include physical cash as well as tips paid by check, credit card, debit card, gift card and other cash-equivalent electronic payments. Tips received through a tip pool or tip-sharing arrangement also count. Non-cash items can have separate recordkeeping and reporting treatment.
What to keep in a daily tip record
- Date and workplaceKnow which employer and shift the entry belongs to.
- Tips receivedKeep cash, card and shared tips clear enough to reconcile.
- Tips paid outRecord tip-out or tips given to other employees.
Keep supporting pay statements and employer reports with your personal records. TipHaven is a personal tracker; it does not file or send reports to an employer or tax authority.
Reporting tips to your employer
The IRS says employees generally must give the employer a written statement of cash tips by the 10th day of the following month when the total from that employer reaches the reporting threshold. An employer may require reporting more frequently, but the statement cannot cover more than one calendar month.
Reporting tips on your federal return
Employees must report all tips on the federal income tax return. IRS guidance explains how unreported cash tips may require Form 4137. Your situation can differ, especially when forms, allocated tips or state taxes are involved, so use current IRS instructions or a qualified professional.
Personal shift record
Keep the daily details while they are fresh.
Track cash tips, card tips, tip-out, wages, hours, job and notes privately on your iPhone.
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