IRS Form 4070A

What Is Form 4070A?

Form 4070A is a tax form distributed by the Internal Revenue Service (IRS) that employees can use to keep track of the tips they receive from customers at work and report them to their employer. Form 4070A is similar to a workbook, with spaces for an employee to indicate the total amount of tips received from patrons. Tips can include cash left by customers, tips that customers add to debit or credit card charges, and tips paid to an employee by other employees through tip sharing, tip pooling, or other arrangements. Workers should record the total amount of tips they paid to other employees and the names of employees to whom the tips were paid.

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Who Can File Form 4070A?

Form 4070A is a voluntary form that employees can use to keep a daily record of tips received to report the total to their employer each month.Workers who do not report their tips to employers using Form 4070A must calculate and pay Social Security and Medicare taxes on the unreported tips when filing their tax returns, using Form 1040 and Form 4137: Social Security and Medicare Tax on Unreported Tip Income.

Special Considerations for Form 4070A:

Occasionally, instead of a cash or credit card tip, a customer may give an employee a non-cash tip, such as tickets to a sporting event or other item of value. For tax purposes, workers do not have to report non-cash tips to their employers or on a Form 4070A. However, the IRS considers non-cash tips as income. So, if a customer tips an employee with two bottles of wine valued at $50 each, the worker must claim that $100 value as income when they file their tax return. This requires workers to keep reliable proof of the tip income they received, such as copies of restaurant bills and credit card charges that show the amounts customers added as tips. Tips not reported to an employer as required may result in a penalty of 50% of the Social Security and Medicare taxes that are due on the unreported tips.

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