The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Riptoast on November 06, 2016, 09:31:11 AM

Title: Tax on cash tips
Post by: Riptoast 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?
Title: Re: Tax on cash tips
Post by: seattlecyclone 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.
Title: Re: Tax on cash tips
Post by: MoonLiteNite 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.