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Here’s a Tip . . .

Earned income is taxable, so if you receive tips in your job, you should count those tips as part of your income. Even if grateful customers reward you with non-cash items, such as tickets or other items of value, you must declare the value of those items to the IRS as part of your income.

If your tip income in a single month is greater than $20, you must also report that amount to your employer. Your employer will withhold income tax, Social Security tax, and Medicare tax on that amount. This process ensures you won’t owe a large amount due when you file your income taxes.

Also, be sure to report all your tips. They may come to you directly from your customers, or as part of a credit card payment, or you may receive a share of the money from a tip-sharing agreement. If you need a handy way to keep a record, the IRS offers Publication 1244, which can be completed electronically.

Need more tips? Watch for more right here—tax free! And if you need a CPA, reach us at Office@CPAsite.com or 904-396-5400.

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Frequently Asked Questions

Q.

How can I increase my child’s financial aid?

A.

Several strategies exist that may increase the amount of aid your child is eligible for:

  • Try to avoid putting assets in your child’s name. Investments owned by a child can impact...
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