If you work as a waiter, it feels great to have a wad of cash in your pocket at the end of your shift. However, you need to remember that tips are considered part of your income -- which means they're taxable in the eyes of the IRS. Failure to report your tips can prompt the IRS to come calling, and that's a situation everyone wants to avoid.
Reporting tip income isn't the most complicated thing in the world, but it does require some careful record-keeping and communication with your employer. When it comes to dealing with the IRS, more records and details are always better than less. Understand the tax laws up front and find out from your employer what's required of you. That way you won't be met with any unpleasant surprises come tax time, and can continue to use the money you've worked so hard to earn.
Continue reading to learn more about how tip income works, and how to report it on your taxes.