No Tax on Tips Helpon the forms that show your tips
Your deduction starts with the amount already on your forms. Here's where to find it, whether you're on a W-2 or work for yourself.
If you're an employee (2025)
The 2025 W-2 doesn't have a separate qualified tips box, so the IRS lets you use any one of these:
Box 7 of your W-2, Social security tips. The total of the Forms 4070 (or similar reports) you gave your employer. A tip amount your employer puts in box 14 or on a separate statement. Plus any tips you reported yourself on Form 4137.
With more than one employer, use the IRS worksheet in the Schedule 1-A instructions. For each employer you take the larger of the W-2 or Form 4070 amount and the Form 4137 amount, then add them up.
Starting with 2026 W-2s
Box 12 with code TP shows the total cash tips you reported to your employer. Box 14b shows the occupation code for your job.
You use both to figure the deduction on Schedule 1-A, Part II.
If you work for yourself
Your tips are included in the totals on Form 1099-NEC, 1099-MISC or 1099-K. For 2025 those forms don't show tips on their own line, and that's fine. The tips just need to be part of what was reported.
Back up the tip amount with records such as receipts, point-of-sale reports, daily tip logs or payment app statements. A rideshare driver, for example, can use the tip total in the app's earnings statement.
Tips count only up to the net income of the business where you earned them. Starting with 2026, the 1099s show tips separately.
Reporting your tips to your employer
Keep a daily record of your tips. When your cash tips reach $20 or more in a month, give your employer a written report by the 10th of the next month. Form 4070 works for that.
Tips you didn't report to your employer go on Form 4137 with your return. That form figures the Social Security and Medicare tax on them, and those tips can still count for the deduction.
Details are on the IRS page for tip recordkeeping and reporting.
What to have for the call
Your W-2 or 1099s for the year, and any tip reports you gave your employer. If you work for yourself, your tip log or app statements. Your job title, so we can find its code on the IRS list.
That's the whole list for a free call of 30 minutes. We'll check if your tips qualify and set up your records.