If you get tips on the job from customers, the IRS has a few important reminders:

• Tips are taxable.  You must pay federal income tax on any tips you receive. The value of non-cash tips, such as tickets, passes or other items of value are also subject to income tax.
• Include all tips on your return.  You must include the total of all tips you received during the year on your income tax return. This includes tips directly from customers, tips added to credit cards and your share of tips received under a tip-splitting agreement with other employees.
• Report tips to your employer.  If you receive $20 or more in tips in any one month, from any one job, you must report your tips for that month to your employer. The report should only include cash, check, debit and credit card tips you receive. Your employer is required to withhold federal income, Social Security and Medicare taxes on the reported tips. Do not report the value of any noncash tips to your employer.
• Keep a daily log of tips.  Use Publication 1244, Employee’s Daily Record of Tips and Report to Employer, to record your tips.

For more information, see Publication 1244 or Publication 531, Reporting Tip Income. You can get them on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

• Tax Topic 761 – Tips – Withholding and Reporting
• Form 4137, Social Security and Medicare Tax on Unreported Tip Income
• Reporting Tip Income – Restaurant Tax Tips
• Tip Income

Would you choose direct deposit this year if you knew it’s the most popular way to get a federal tax refund? What if you learned it’s safe and easy, and combined with e-file, the fastest way to get a tax refund? The fact is almost 84 million taxpayers chose direct deposit in 2013.

Still not sure it’s for you? Here are four good reasons to choose direct deposit:

1. Convenience.  With direct deposit, your refund goes directly into your bank account. There’s no need to make a trip to the bank to deposit a check.
2. Security.  Since your refund goes directly into your account, there’s no risk of your refund check being stolen or lost in the mail.
3. Ease.  Choosing direct deposit is easy. When you do your taxes, just follow the instructions in the tax software or with your tax forms. Be sure to enter the correct bank account and routing number.
4. Options.  You can split your refund among up to three financial accounts. Checking, savings and certain retirement, health and education accounts may qualify. Use IRS Form 8888, Allocation of Refund (Including Savings Bond Purchases), to split your refund. Don’t use Form 8888 to designate part of your refund to pay your tax preparer.

You should deposit your refund directly into accounts that are in your own name, your spouse’s name or both. Don’t deposit it in accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Check with your bank for their direct deposit requirements.

Helpful tips about direct deposit and the split refund option are available in Publication 17, Your Federal Income Tax. Publication 17 and Form 8888 are available at IRS.gov or by calling the IRS at800-TAX-FORM (800-829-3676).

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