Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant? The Internal Revenue Service considers your tips taxable income. As such, they are subject to federal income, Social Security and Medicare taxes, and may be subject to state income tax as well.

The IRS "requires" that you keep a running daily log of all your tip income. If you receive $20 or more in tips in any one month, you are supposed to report all your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes, and to report the correct amount of your earnings to the Social Security Administration (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die).

Source: IRS

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