Tips, the extra wages that many customer service workers rely on to make ends meet, aren’t free money. They must be reported to the IRS. This can include cash or noncash payments that the customer voluntarily makes in addition to regular service fees or costs.
Typically considered a gratitude sign for services, tips can be a critical income source for service workers, often earnning minimum wage. Suggested tip percentages now range from 5% to 30%.
