Wow. Glad I exited this a while ago. You are quite correct that most people are honest and keep good records, and I'm disappointed if people are implying otherwise in this forum. Self-employed in...
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Wow. Glad I exited this a while ago. You are quite correct that most people are honest and keep good records, and I'm disappointed if people are implying otherwise in this forum. Self-employed individuals who keep good records should be able to deduct their tip income even if it's not included on a 1099. The people correctly interpreting the tax law and IRS guidance also have a point - TurboTax must comply with the law and regulations as written. As foolish as it sounds, Congress specifically required tips to show up on a 1099 in order to be deductible. That ties the IRS' hands and it ties TurboTax' hands. If and when Congress decides to be a little more flexible with the language they put into the tax code I'm sure all the major tax providers - including TurboTax - will jump on the chance to help hard working self-employed folks take full advantage. In the meantime, we're stuck with what was written, including not allowing a deduction for tip income not included on a form 1099.