My wife does seasonal gardening work. Her employer pays her hourly, withholds taxes, provides W-2s, etc. She does her work on a single property, and last year the owners of the property gave her an extra (off-the-books) cash payment at the end of the season. I'm not sure whether to call it a bonus or tip, or what the implications of that might be. How do I report this on our income tax return?
- The property owners have a business relation with her employer, but the payment was from them as private citizens, not from her employer.
- We're married filing jointly, and around median household income if that makes any difference.
Edit: I guess this is primarily a question of classification... what exactly is this money considered? A tip? A bonus? A gift?