How to report self-employed tips

rebsjb · ‎February 9, 2026

I am the sole employee/owner of a coffee shop. I'm trying to report my barista tips to be able to receive the new tax deduction. But I am unsure what form to fill out. I tried filling out the form 4137 but it wants to take the information from my previous employer instead of my current business. Any help would be appreciated!

CesarJ · ‎February 10, 2026

Because you are self-employed and the owner of the coffee shop, you can't use Form 4317 to report tips. Employees only use Form 4317 to report underported tip income received by the employer. Since you are both the owner and worker, your tips are considered self-employment income.

Your barista tips should be included in your business income. You should report them on Schedule C, along with your other business income and expenses.

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Sharmon

If you are including the tips in your self employment income, where in turbo tax do you put the amount of that income received as tips? When you report the w2 income the tips are included in a separate box. I don't see anywhere in the schedule c to report the tips to be excluded from the income.

PatriciaV

Here's how to enter tips from self-employment in TurboTax Online:

Go to the Self-Employment topic under Income in the Federal section
Answer Yes on the Did you have any self-employment income or expenses? screen.
If you land on the Your 2025 self-employed work summary page, select Review next to the work you're adding income for.
Answer the questions on the following screens until you arrive at Let's enter the income for your work.
Select Other self-employed income. Select the checkbox if you have tips to report.
- Tips that qualify for the deduction are on a 1099 form and are included in the gross income box of the form. The forms don’t have a separate box just for tips.
- Tips that aren’t included in the gross income box of a 1099 form are not currently eligible for the tips deduction. If your tips weren’t included on a 1099 form, then your tips aren’t deductible.
  You can still report these tips on your tax return, even if they aren't eligible for the deduction right now. Their eligibility may change in the future. If it does, then your tips info will already be saved in TurboTax.