IRS Form 4070A, Employee's Daily Record of Tips is a form used by employees to keep track of tips they received from customers.
The most recent version of this form was issued by the Internal Revenue Service (IRS) in August 2005. IRS Form 4070A fillable version is available for download below.
The employees receiving tips at work must report them to their employer and in their tax return, including cash tips, tips, received from customers debit or credit cards and items of value, such as tickets or passes. All kinds of tips are considered income and are subject to federal income tax. The IRS tip reporting form does not require recording tips received in a form of an item of value, but they must be reported in the tax return.
IRS Form 4070A can be used with the IRS Form 4070, Employee's Report of Tips to Employer. This form is used to report tips received in a month or any other period of time, as it is required by the employer. The daily record of tips is used to facilitate monthly tips report.
The employer requires tips reporting to withhold taxes from your paycheck properly and report the employee's earnings correctly to the Social Security Administration (SSA). Proper reporting of income will affect the benefits the employee will receive after retirement.
Using IRS Form 4070A is voluntary. If the employee desires, they can keep their own record of tips. This record must include their name and the name of their employer, the number of tips received in cash, added to debit and credit card charges and tips they paid to other employees through tip sharing. If the establishment uses an electronic system to record tips, the employees must keep a record on paper anyway.
If tips are not reported to the employer, this may lead to a penalty of 50% of the Social Security and Medicare taxes that are due on the unreported tips. However, the penalty can be avoided, if the employee can prove that they had a reasonable cause for non-reporting their tips.
Additional information and instructions for completing the IRS Form 4070A can be found in the IRS Publication 531.
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