I spent 25 years in the gaming business in Nevada. Dealers were fighting the IRS back in the 1980s claiming that tips were "gifts" and therefore untaxable. The IRS didn't buy it. What about tips in the hat while on the street? These would seem to actually quality as gifts as the spectator can tip or walk, but then they do the same thing at a blackjack table as well. Any street magicians out there who gave up their CPA career?

Just as waitresses and bartenders are required to claim tips, so are street performers. I file my on a schedule C, and keep receipts for deductions.

I'm no accountant, but I believe that tax-free gifts only apply to family members ... thus if someone gave you a large sum of money for no reason at all, you would still be paying taxes on it. Yes?

JoeJoe

Some time ago, a homeless man sued N.Y. for the right to pay taxes, with out being a taxpayer he was ineligible to collect some form of benefits. As the story goes, he lost, tho he made good mony panhandiling, the avrage gift was a dollar and since he nither got it at one time or one place he would have to file each dollar separate, and the state would not take it.
this story has bin floating arownd for a while, if it is true I am sure some goverment stooge has "fixed" this loop hole.

If you work for tips, rest assured that it is income. In fact, if you think about most hat pass lines, they refer to the idea that the people have seen a show, and now it's time to pay up. Even if it's a "gift," there is a service rendered.

OTOH, you can deduct all your expenses. If you can find a really savvy accountant, and I don't mean the guys who set up shop from January 1 to April 15 in Wal-Mart, sit down with them and tell them what you are interested in learning.

My accountant worked his way through college as a piano player in a restaurant/bar in Austin, TX. The IRS came in and busted the whole place for tax evasion, because they didn't report their tips. My accountant was the only one who did. The Feds have been known to sit in parking lots with binoculars and watch the money going onto the table.

One year at TRF, there was a dulcimer player who also worked for the IRS. So you never know when or where the federales will turn up.

You definitely don't want to be caught short.