The IRS considers tips to be taxable income. Typically you report your tips to your employer, who then includes them on your W-2.
If you didn't report all your tips to your employer, you can still report them to the IRS. Just follow the steps below:
- Search for W-2 and select the Jump to link in the search results
- If that employer's W-2 was already entered on the Your W-2 info so far screen, select Edit next to that employer
- If you haven't entered that W-2 yet, follow the on-screen instructions or select the Add a W-2 button to add the employer
- Enter information from the W-2 as needed and select Continue until you reach the Let's check for uncommon situations screen
- Select the box for Unreported tips and select Continue
- On the Now let's enter your unreported tips screen, enter the amount of your tips
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