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Anyone know about reporting tips?

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My dd started working at a local coffee shop a few weeks ago.    Now she's been there long enough she's getting a portion of the tips.   Today she came home with a little bit of cash.    She's making normal minimum wage, but apparently she is going to get some tips too.   There is a tip jar and apparently at the end of every shift the manager divvies it up.   So this isn't like money someone gave directly to her, and the manager clearly knows about it.

DH and I have absolutely no experience with this.   Trying to read the IRS website is making my head spin.   Other than having to report more than $20 a month in tips, I can't make sense of it.  Relying on my dd to actually ASK her employer what she's supposed to do....well.....probably not going to happen.

Is the employer supposed to be keeping track of this for her for tax time, or should we be making her keep a log?   

I mean, maybe she isn't going to earn enough money overall for it to matter but I don't want to have to scramble and figure it out when tax time comes around....



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She should be keeping track, technically.  That way she has her own record to compare with what her employer reports at the end of the year on her W-2.

If she's already getting minimum wage, it's not as big of a deal, really.  I'm glad she's getting tips on top of minimum wage.

The software I'm familiar with records credit card tips according to whoever made the sale and that money is dispersed on paychecks.  There is also a way to record cash tips in most payroll systems for tracking and reporting on W-2s.  I'd guess that if the boss is paying out the cash tips, he/she is also recording them.

How much tip money are we talking about?  She may not even have to file a return if she meets certain guidelines.  (See Publication 501 on irs.gov)  What are her withholding amounts? 

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