Waitresses allegation address tips on their assets tax returns.
Employees in the aliment and cooler industry should accept an anniversary W-2 from their employers. As a waitress, you abatement into this category. Your employer puts your absolute advantage and taxes paid during the year on your W-2. Advantage includes your appear tips.
Box 1, which is the Wages, Tips, Other Advantage area of your W-2, shows your appear tips and accomplishment becoming for the tax year. Your employer puts your anniversary denial for federal assets tax in Box 2 of the W-2, your Social Security denial in Box 4, your Medicare denial in Box 6, your accompaniment assets tax denial in Box 17, and your bounded assets tax denial in Box 19.
As of 2012, if all employees’ tips appear to your employer according beneath than 8 percent of gross sales, your employer allegation admeasure the aberration amid the angled employees. The allocated bulk depends on your allocation of gross receipts or absolute hours worked, or on a accounting acceding amid you and your employer. Your employer puts your allocated tips in Box 8 of the W-2, but it does not abstain any tax on those tips back you did not address them. According to the Jackson Hewitt website, “with a few exceptions, you allegation address your allocated tips on your tax return. If your Form W-2 shows allocated tips, an added tax may be affected on Form 4137. Social Security and Medicare Tax on Unreported Tip Income, to awning the Social Security and Medicare taxes that were not withheld from the allocated tips.”
If your accomplishment and appear tips are not abundant for tax withholding, your employer can abstract the contributed tax from your aing paycheck. You can accord your employer the money against the end of the year to pay the actual taxes due. If you abort to accord your employer abundant money to awning the denial bulk due, your employer can administer your approved accomplishment and appear tips to the contributed bulk in the adjustment that the IRS mandates. If the denial stays uncollected by year end, the IRS can allegation you a amends for underpayment of estimated taxes. Your employer should put your uncollected Social Security and Medicare taxes in Box 12(a) and Box 12(b) of your W-2. Back you book your tax acknowledgment with the IRS, you address the uncollected bulk as an added tax.
If you accept $20 or added per ages in tips, you allegation address your absolute tips accustomed to your employer in autograph by the 10th day of the aing month. You do not accept to address tips of beneath than $20 to your employer, but they are taxable. Address unreported tips, additional the amount of any non-cash tips, such as passes and tickets, to the IRS and pay the taxes due. Depending on your accompaniment and bounded government, the aforementioned affair may administer back you book your accompaniment and bounded tax return. You can use IRS Form 4070A to clue your circadian tips and Form 4070 to address tips to your employer.
Grace Ferguson has been autograph professionally back 2009. With 10 years of acquaintance in agent allowances and amount administration, Ferguson has accounting abundantly on capacity apropos to application and finance. A analysis biographer as well, she has been appear in The Sage Encyclopedia and Mission Bell Media.
Ferguson, Grace. “Does the Employer Put a Waitress’s Tips on the W2?” Work – Chron.com, http://work.chron.com/employer-put-waitresss-tips-w2-15004.html. Accessed 17 October 2018.
Ferguson, Grace. (n.d.). Does the Employer Put a Waitress’s Tips on the W2? Work – Chron.com. Retrieved from http://work.chron.com/employer-put-waitresss-tips-w2-15004.html
Ferguson, Grace. “Does the Employer Put a Waitress’s Tips on the W2?” accessed October 17, 2018. http://work.chron.com/employer-put-waitresss-tips-w2-15004.html
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