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All income is taxable, including gig economy and tip income
It’s important for taxpayers to file a federal tax return that has a complete and correct reporting of their income – which may mean including income from sources other than regular wages from an employer. Income from gig economy activities and tip income are two common sources of such income.
Gig economy earnings are taxable
Taxpayers must report income earned from the gig economy on a tax return, even if the income is:
For more information taxpayers should visit the gig economy tax center page of IRS.gov.
Reporting service industry tips
Tips are optional cash or noncash payments customers make to employees.
Employees don’t have to report tip amounts of less than $20 per month per employer. For larger amounts, employees must report tips to the employer by the 10th of the month following the month they received the tips.
The employee can use Form 4070, Employee’s Report of Tips to Employer, available in Publication 1244, Employee’s Daily Record of Tips and Report to Employer, or they can use an employer-provided form or other electronic system used by their employer.
For more information on how to report tips taxpayers should review the Tip Recordkeeping and Reporting page of IRS.gov.
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