Keeping a Daily Tip Record

Why keep a daily tip record? You must keep a daily tip record so you can:

• Report your tips accurately to your employer,
• Report your tips accurately on your tax return, and
• Prove your tip income if your return is ever questioned.

How to keep a daily tip record. There are two ways to keep a daily tip record. You can either:

1. Write information about your tips in a tip diary, or
2. Keep copies of documents that show your tips, such as restaurant bills and credit card charge slips.

You should keep your daily tip record with your personal records. You must keep your records for as long as they are important for administration of the federal tax law.

If you keep a tip diary, you can use Form 4070A, Employee’s Daily Record of Tips . To get a year’s supply of the form, ask the Internal Revenue Service (IRS) or your employer for Publication 1244. Each day, write in the information asked for on the form.

If you do not use Form 4070A, start your records by writing your name, your employer’s name, and the name of the business if it is different from your employer’s name. Then, each workday, write the date and the following information.

• Cash tips you get directly from customers or from other employees.
• Tips from credit card charge customers that your employer pays you.
• The value of any noncash tips you get, such as tickets, passes, or other items of value.
• The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips.

Do not write in your tip diary the amount of any service charge that your employer adds to a customer’s bill and then pays to you and treats as wages. This is part of your wages, not a tip.

Electronic tip record. You may use an electronic system provided by your employer to record your daily tips. You must receive and keep a paper copy of this record.

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