How to File Taxes as a Restaurant Waitress

Waitresses and waiters typically make most of their money from tips. Like the wages a restaurant pays its serve staff, your tips are besides taxable. however, the majority of tips are much paid in cash directly to you when you wait tables in a restaurant. Because of this, you are required to adhere to limited report and tax file rules in order to ensure that you comply with IRS regulations.


  • You can use IRS Form 4070 to report cash tips you earn while waiting tables. Although it may be tempting not to disclose these tips to the IRS, failure to adequately report this income could result in unplayful fines or penalties .

Tips and Taxes for Servers

Tips may be paid in the form of cash, add-ons to credit calling card purchases or from fellow workers in a tip-sharing organization. Tips don ’ t include service charges like boastfully party fees collected on your behalf by the restaurant. Service fees count as wages. The IRS says to report all tips to your employer in any calendar month you get $ 20 or more using IRS form 4070 or an equivalent report method. Any tips you don ’ thyroxine report to your employer have to be added to other income reported on your annual tax rejoinder.

Understanding The Tip Credit

restaurant employers only have to pay servers $ 2.13 per hour, as of the fourth dimension of issue, compared to the federal minimum engage of $ 7.25. The difference is called a “ lean credit. ” If you don ’ t make enough tips to bring your hourly engage up to minimum engage, your employer has to make up the deviation. Your paycheck might not be enough to cover payroll taxes, as the measure employers pay is normally a little depart of earnings. The IRS says payroll taxes not withheld from one paycheck must be deducted from the future. however, any payroll taxes that are not collected for a calendar month by the 10th of the following month don ’ t have to be withheld from your pay up. Uncollected taxes are listed in box 12 on your year-end W-2 statement, and you ’ ll have to pay them when you file your taxes.

Issues With Unreported Tips

When a waitress earns tips and doesn ’ deoxythymidine monophosphate report them to her employer, she is creditworthy for claiming them on her tax return and adding them to her early income when calculating federal income tax. Uncollected Social Security and Medicare taxes are computed using IRS form 4137. The amounts from the 4137 imprint are entered on the tax return and added to the full of taxes due.

Rules Concerning Tips and Taxes

IRS rules require restaurants to report tips for waitresses and waiters amounting to at least 8 percentage of gross sales. When a waitress reports tips that total less than 8 percentage of her sales, the employer must “ allocate ” the dispute. The deficit is listed in box 8 on her W-2 form. Employers don ’ t take any taxes out on allocate tips. The wait must report the allocate tips on her tax return and pay the taxes or express that she didn ’ t make the allocated gratuity sum.