Publication 531 (2023): Reporting Tip Income

Publication 531 is an Internal Revenue Service (IRS) guide for employees who receive tips. It explains how to track, report, and pay taxes on your tip income accurately.

What is Publication 531?

In simple terms, Publication 531, issued by the IRS, is your guide to reporting tip income correctly on your federal tax return. It explains what qualifies as tip income, how much to report, and different reporting methods.

Who Needs Publication 531?

A. Employees who receive cash or non-cash tips: Servers, bartenders, hairstylists, delivery drivers, etc.

B. Employees in tip-splitting or tip-pooling arrangements: Sharing collected tips with other employees.

Key Points to Remember About Publication 531:

  • All tips are taxable: This includes cash, credit card tips, charged tips paid by your employer, and your share of tip pools or splits.
  • Track your tips: Keep a daily record of your tips received, even if you report them to your employer. Use Form 4137 for unreported tips.
  • Reporting to your employer: If your monthly cash and charged tips exceed $20 from one job, report them to your employer by the 10th of the following month.
  • Tax implications: Tips count towards your income tax, Social Security, Medicare, and Additional Medicare taxes.

Latest Updates for 2023:

  • No significant changes were made to Publication 531 for 2023 compared to the 2022 version.

For the current year's Publication 531: Reporting Tip Income, click here.