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What is Form 4070, and How to Fill it Out

Tax season is upon us yet again. For many of us, this time of year is dreaded as we scramble to get our paperwork in order. One of the forms that we may need to complete is Form 4070. This form is used to report tips received by employees. Here is a brief overview of what you need to know about Form 4070.
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What is Form 4070: Employee Tip Reporting?

Tip Form 4070 is an IRS form used to report tips received by an employee. The employee must complete the form and submit it to their employer by the end of the month in which the tips were received. The employer is then responsible for forwarding the form to the IRS.

Tips are considered taxable income and must be reported on Form 4070. The amount of tax owed on tips is calculated using the employee's marginal tax rate.

Who Should File an Employee's Report of Tips to Employer?

Any employee who makes more than $20 in tips in a single day is required to report those earnings to their employer on Form 4070. You will need to submit these in a report by the 10th day of the next month unless that day is a holiday or weekend.

How to Complete Form 4070?

There are two ways to report tips on Form 4070. The first is to include the tips with your regular wages on your Form W-2. The second is to report the tips separately on Form 4070.

If you choose to report tips separately on Form 4070, you must complete the following information:
  1. Your name, address, and Social Security number;
  2. The name and address of your employer;
  3. The date you received the tips;
  4. The total amount of tips you received;
  5. The total amount of tips you reported to your employer;
  6. Your signature;
  7. Your employer's signature;
  8. Your employer's phone number.
Once you have completed Form 4070, you should give it to your employer. Your employer is responsible for forwarding the form to the IRS.

If you have any questions about Form 4070 or how to report your tips, you should contact your employer or the IRS.

Frequently Asked Questions

What do allocated tips mean?
"Allocated tips" refers to tips that are specifically designated for distribution to employees. Allocated tips may be given to employees in cash or may be added to their regular paychecks.
How to calculate allocated tips?
To calculate allocated tips, divide the total amount of tips earned by the number of employees who worked during the shift.
How to report tips to IRS?
All tips that are received by an employee must be reported to the IRS. The employee must complete a Form 4070A, which is available on the IRS website. The form must be completed and filed with the employer.
How must an employer report tips to the IRS?
An employer must report tips to the IRS by completing a Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips.
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