Caddies are traditionally independent contractors, although some are classified as employees. Golf clubs typically pay caddies a fee for each round they work, but most of their income usually comes from tips. As far as the Internal Revenue Service is concerned, it’s all income that must be claimed on your tax return.
Caddying, Tips and Taxes
If you caddy as an independent contractor, fees you earn from the golf club and your tips are self-employment income. You’ll get a 1099 form documenting fees from the club that you attach to your tax return. You have to report all fees and tips if the total is more than $400 for the year after decocting business expenses. Use IRS Form 1040, Schedule SE to figure your taxable self-employment income.
Caddying as an Employee
If you are an employee, you’ll get a paycheck and the golf club should deduct payroll taxes and give you a W-2 form at year’s end. You must report all tips in any month you get more than $20 in tips. The tips will be included on your W-2 form. If you don’t report all of your tips each pay period for some reason, you still have to claim the unreported amounts when you file your tax return.
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