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The Money Mustache Community
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Tax on cash tips
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Topic: Tax on cash tips (Read 2068 times)
Riptoast
5 O'Clock Shadow
Posts: 25
Tax on cash tips
«
on:
November 06, 2016, 09:31:11 AM »
I just recently started working full-time as a bartender and am taking home a decent amount each month in cash tips. As I understand it, it is up to me to record and report my total cash tips when I fill out my taxes, so they will end up being taxed at the same rate as my salary. Does anyone have any advice or strategies for a completely legitimate and legal way to minimize taxes on these tips?
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seattlecyclone
Walrus Stache
Posts: 7263
Age: 39
Location: Seattle, WA
Re: Tax on cash tips
«
Reply #1 on:
November 06, 2016, 09:38:31 AM »
Same as any other income: you can put money into an IRA, contribute to an HSA, donate to charity, get a mortgage, move cities for a new job, have kids, etc. There's really no difference between this income and any other job-related income.
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MoonLiteNite
Bristles
Posts: 411
Re: Tax on cash tips
«
Reply #2 on:
November 06, 2016, 07:33:37 PM »
Only legal way to not pay taxes on the tip is to find the money on the ground and not claim them as tips.
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Tax on cash tips