What this line means
The total amount of cash and charge tips you received during the year from all jobs where you earned tips. This includes tips paid directly to you by customers, your share of split tips, and tips from credit or debit card transactions. Enter the full amount before any tip-outs or sharing arrangements with other employees.
Does this apply to you?
- You worked as a server, bartender, or other tipped employee at any point during the year
- You received cash tips directly from customers
- You received your share of charged tips from credit or debit card transactions
- You drove for a rideshare or delivery service and received cash tips
- You worked in a salon, spa, or other service industry where customers tip
Easy to overlook
Cash tips below the monthly reporting threshold You must report all cash tips to your employer if they total $20 or more in any single month. Tips below $20 in a given month do not need to be reported to your employer, but they are still taxable income. Filers who earn small but consistent cash tips across many months often assume these amounts are too small to matter. They are still subject to income tax and must be included on your return. 1 IRS Publication 531 — Reporting Tip Income
Tips from non-traditional tipping jobs Tip income is not limited to restaurant work. Hairdressers, valet attendants, delivery drivers, hotel housekeepers, and casino dealers all receive reportable tips. The IRS uses industry-specific tip rate studies to estimate expected tip income, and returns showing zero tips in tip-heavy occupations trigger automated review. 2 CP2000 pattern — unreported tip income from cash-heavy jobs
Watch out for this
Including tip-outs or tip pool contributions you paid to other employees. Line 1 is your gross tips received before sharing. If you received $200 in tips and tipped out $40 to the busser, line 1 is $200. The tip-out is not deducted here — it reduces the amount you actually kept, but the IRS wants the full amount received first.
Footnotes
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IRS Publication 531, Reporting Tip Income. https://www.irs.gov/pub/irs-pdf/p531.pdf ↩
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IRS Tip Rate Determination/Education Program. https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting ↩