Investor Glossary-tip incomeInvestor Glossary-tip incomeInvestor Glossary-tip incomeInvestor Glossary-tip incomeInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Tip Income

The HTML to link to this page
 

Tip income is compensation in addition to salary or hourly wages earned. Tip income can be received in the form of cash, check or credit card. Tips, also known as gratuities, are considered income and must be reported to both the employer and the IRS. Tip income received in a calendar month that is at least $20.00 must be reported to an individual's employer and is subject to FICA, FUTA and income tax withholding. Employees have until the tenth day of the calendar month to report to their employer tip income received the previous month. Tip income is reported to an employer using IRS Form 4070 (i.e. Employee's Report of Tips to Employer). Tip income of less than $20.00 in a given calendar month is still subject to income tax (reported on IRS Form 1040 or Form 1040EZ), but is not subject to withholding. A daily tip record must be kept for accurate reporting of tip income. This can be done with a personal tip income diary or IRS Form 4070A (i.e. Employee Daily records of Tips). Social security and Medicare taxes that have not been withheld by the employer as a result of tip income not being reported by the employee must be included as additional tax on the employee's tax return. The employee can use Form 4137 (i.e Social Security and Medicare Tax on Unreported Tip Income) to calculate the taxes owed (underpayment of estimated taxes penalty may apply).



Rate this Tip Income definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, FTSE, EBITDA, FICO score, 401a, reverse mortgage, liquidity ratio, average price per share, phantom income, cancelled check, 144a, retained earnings, inflation, class C shares, LIBOR, diluted share, Key Rate Duration, APR, command economy, minority interest, option premium, balance sheet, ex-dividend, VIX, stock split, risk management, debt service coverage, implied volatility, real GDP, deferred revenue, 1035 exchange, required rate of return, quality assurance, covered put, stock market close, ex-dividend date, labor relations, annual return, Zero Cost Collar, current ratio, dividends payable, 1031 exchange, limit order, open position, per diem, margin rate, irrevocable trust, deferred tax, wholly-owned subsidiary


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use