How to File for Taxes & Claim Tips
- 1). Keep a daily record of the tips your receive on your work shifts (see References 1). This will help you prove your tip income should the IRS or your State Tax Authority decide to audit your file (see References 1). Use Form 4070A to help you keep track of your tips, a link has been provided in the resource section below.
- 2). Add the income amounts listed on your W-2 forms and add to that amount the total amount of tips you recieved during the course of the tax year. Note the total.
- 3). Fill out your Federal Income Tax Form. For the majority of tax payers, the form will be IRS Form 1040. On line 7, enter the total you arrived at in Step 2. Continue to fill out the tax form according to its instructions.
- 4). Fill out your State Income Tax Return. Your State Income Tax Return will require you to list your "adjusted gross income" from the Federal Form completed in Step 3. "Adjusted gross income" is a term referring to your income for the tax year minus any applicable deductions. Your State requires you to list your AGI from the Federal Form so that you do not have to figure the amounts twice (since your State Income is not going to differ terribly from your AGI and the State Tax Form will have instructions on how to make adjustments).
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