Im a server in a restuarant. I need to deduct "tip outs" paid to bussers, bartenders, and food runners paid each time i worked. It adds up to $$$Thousands$$$. How?

Forum|Forum|7 years ago
June 6, 2019
3 replies
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TurboTax Free Edition Online

MargaretL

Level 12

All you have to do is reduce that tip income that you are reporting. For example, if you receive a $1000 tip and give bartender $250, you only need to report $750 as your tip income.

When you enter your W-2 form, be sure to select box Unreported Tips when you see the screen Do any of these uncommon situations apply to this W-2... and continue through the prompts. On the Tips Not Reported to (employer name) screen, answer the question about your tips. On the Enter Any Tips You Didn't Report to (employer name) screen, enter the amount of your tips.

This link shows you exactly how to report it... the data entry is immediately after you enter your W-2 form:

https://ttlc.intuit.com/questions/1899731-entering-unreported-tips

If you'd like, more information on tip income:

https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Return/How-to-Claim-Tips-on-Your-Tax-Return/INF14782.html

champton89

Level 2

This isn't regarding tips reported to the employer. Is the tip out amount going unreported? Your total gross income is including your tip out, correct? What about line 21 is that a box to add total tipout for the year?

fanfare

Level 15

Your employer is supposed to deduct tip-outs on your W-2.

If that is not done, you're on the hook for that tax on that.

Gunnarbear1

Level 2

This is the question but where is the answer

Vanessa A

Level 15

The answer is above by ErnieSO.

Basically, even though they are tip outs, IF your employer DID include the tips you paid out to others as tip sharing, then you would enter your W-2 and afterwards, you would select Unreported Tips under Lets Check for Uncommon Situations.

Then you will enter Total Tips that you piad out through tip sharing. Do NOT include tips on here that were NOT included on your W-2.

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greatpal

Level 2

Do you know then how the tips that are on your w-2, but a portion has been paid out to a tip pool is actually reflected on the tax return?

Thanks!

greatpal

Level 2

The owner will not amend your W-2, You cannot go the IRS, DOL, BBB or the Hague.

How do I reduce my tip income reported on my w-2 on my 1040?

It cannot be done on IRS Form 4137 because the is only for unreported tips that you received.

I do not think it advisable to enter what is on your w-2 less these payouts.

I am thinking maybe put on Schedule 1 Line Z, and describe it as maybe redistribution of Tips???

Anyone? Thanks!

SusanY1

Level 15

There is a way to make an adjustment to your allocated tips, but you must be sure that you have an appropriate and complete log of all tips, such as a tip book, to substantiate the adjustments.

This is more commonly done for instances where your allocated tips are based on sales but are less than what you actually received, rather than for tip-outs.

However, the mechanics of adjusting the allocated tips in TurboTax are to adjust the box 8 number in the follow up questions after entering your W-2.

You do not send any tip book/tip log that you have with your return but keep it somewhere that you can easily access it for at least 3 years in case the IRS asks you to support the adjustment.