If you are a food or beverage service employee, you should receive Form W-2, Wage and Tax Statement , from your employer. A food or beverage service employee may be a bartender, cook, kitchen helper, waitress/waiter, busboy, maitre d', hostess, dining room captain or wine steward.
You may receive additional income in the form of tips. Any tips that you reported to your employer are included with your wages on your Form W-2, Box 1. Although you are not required to report tips of less than $20 a month to each employer, these tips are still subject to income tax. You must also include in income the value of non-cash tips such as tickets and passes, and any other tips received but not reported. Additionally, if your employer allocated tips to you, they are shown on your Form W-2, Box 8. They are not included in Box 1 with your wages and tip income that you reported to your employer.
Your employer would have allocated tips to you if:
- You worked in a restaurant, cocktail lounge, or similar business that must allocate tips to employees
- The tips that you reported to your employer were less than your share of 8% of the food and drink sales
With a few exceptions, you must report your allocated tips on your tax return. If your Form W-2 shows allocated tips, an additional tax may be calculated on Form 4137, Social Security and Medicare Tax on Unreported Tip Income , to cover the Social Security and Medicare taxes that were not withheld from the allocated tips.
You may be able to reduce your taxes by deducting certain unreimbursed, job-related expenses. You should keep receipts to substantiate these expenses. Examples of some of the items you may be able to deduct include:
- Cost and cleaning of uniforms that are required as a condition of your employment and that are not suitable for everyday wear (for example, a white service uniform or a costume uniform would qualify for deduction, but an employer-required uniform consisting of a white shirt, black pants, and black shoes is not distinctive in the nature of a uniform and would not be deductible)
- Fees for occupational taxes or licenses
- Employer-required medical exams for which you are not reimbursed
- Subscriptions to professional journals and trade magazines related to your work