How do I keep a record of my tip-outs for taxes?
The short answer
Example math
You’re a server. Here’s one weekend in your log (all amounts illustrative):
| Day | Tips you got | Paid out | To whom | Kept |
|---|---|---|---|---|
| Fri | $320 | $40 busser, $20 bar | Maria (busser), Dev (bar) | $260 |
| Sat | $410 | $50 busser, $25 bar | Maria (busser), Dev (bar) | $335 |
| Sun | $270 | $30 busser | Luis (busser) | $240 |
| Total | $1,000 | $165 | $835 |
- You report the $835 you kept, not the $1,000 you got.
- The $165 and the names in your log show where the difference went. Maria, Dev, and Luis report what they received.
- Add up each month’s kept tips and give your employer the total by the 10th of the next month.
Not tax advice. Names and amounts are made up for the example.
Check your estimate
Enter the tips you kept after tip-outs for the year, the total your log adds up to.
Open the calculator
Plain English
What the IRS says to write down
For taxes, each workday your record should show the tips you got, cash and card, from customers or from other employees. It should also show the amount you paid out to other employees through tip pools, tip splitting, or other arrangements, and the names of the employees you paid. That last part is what backs up reporting only what you kept.
Any format works
A notebook, a notes app, a tip-tracking app, or your employer’s system can all hold your daily record. If you use a system your employer provides, the IRS says you must receive and keep a paper copy.
The old IRS forms are retired
Forms 4070 and 4070A used to be the IRS’s tip report and daily tip record. The IRS now lists both as historical. You don’t need to fill them out. The old 4070A layout, with columns for tips paid out and who got them, is still a handy model for your own log.
Your log feeds everything else
Your monthly report to your employer comes from this log, and that report is what ends up on your W-2 (for 2026, box 12 code TP). Tips need to be on your W-2 or reported on Form 4137 to count for the federal tip deduction. See Do I pay tax on the tips I tip out? and I get tip-outs from servers. Do I have to report them?
Common mistakes
- Writing down only what you kept, with no record of what you paid out or to whom.
- Relying on your employer’s electronic record without keeping a paper copy.
- Rebuilding the log from memory at the end of the year.
- Hunting for Form 4070A as if it’s still required.
Official sources
Last verified:
Checked IRS Publication 531 (daily tip record, electronic records, historical Forms 4070 and 4070A), the IRS tip recordkeeping page, and the 2026 W-2 instructions.