The simple answer is you are not allowed to deduct tip-outs. The real answer is only slightly more complex.
There are three ways tips are reported, by employees*, for tax purposes:
1. Box 7 of your W-2. This is the amount you reported to your employer and is already included in box 1 of your W-2 as taxable income. It cannot now be adjusted for tip outs. Your employer was suppose to have already done that. If you believe it's incorrect, you have to ask your employer for a corrected W-2 (that's unlikely to happen).
2. Box 8 of your W-2. This is "allocated tips". The IRS requires your employer to assume you got this much more in tips, if the amount you reported doesn't meet an IRS standard. This will be added to the amount in box 1, as income, and go on line 7 of form 1040. This also cannot be adjusted for tip-outs (see
https://www.irs.gov/faqs/interest-dividends-other-types-of-income/tips/tips
However you are allowed to claim an adjustment (see below**), if you believe the amount to be incorrect. But this will invite IRS scrutiny.
3. Unreported tips. These are not already on your W-2. You input it yourself, as described by TurboTaxDarrellM, below. You may deduct tip-outs from the amount your report.
**Allocated Tips. If TurboTax (TT) detects an amount in box 8 of the W-2, it will already have checked "Unreported Tips" at the screen titled "Do any of these uncommon situations apply to this W-2". If not, you should check it. That will take you to a screen where you can enter the correct amount. In your case, you would enter $1300 less than the box 8 amount in the adjustments box. For example if box 8 was $3000, you would enter $1700 in the adjustments box.
*People who work for tips only (no W-2 wages), report their tip income as self employment income.
