The respondent said "The tips MUST be reported. If they are not reported on a form to the IRS you cannot claim them for the no tax on tips deduction."
Hmm???? That's seems incorrect. If you worked in a qualifying tipped occupation, and your tips otherwise qualify for deduction, you are entitled to a deduction.
If the tips are not properly disclosed on the W-2, box 7, then your employer completed the form incorrectly. Your best option is to ask the employer to issue an Amended W-2... or maybe its called a Corrected W-2. I am not sure. Anyway, your employer may need to (and should probably) issue amended W-2s for all tipped employees. (He's not going like you for raising the issue... but that's not your problem.)
If the employer will not issue an amended W-2, legally your are still entitled to the tip deduction. It part of the law. A work around would be to merely deduct your allowable tips from social secuity wages (box 3) input form on turbo tax and input them in as social security tips (box 7). This should should "trick" the system for purposes of claiming the tip deduction and filing your retrun. A word of caution, though... the IRS may send you a love letter, asking you to explain why the tips deduction on Schedule 1-A does not agree with the Form W-2, box 7. This is not an audit! Its just a query, You should be able to simply reply to the letter, explaning how the tips were not properly reported by your employer, and provide the IRS a copy of you final paystub showing the total annual tips.
Of course my suggested work around will result in addition correspondence, all of which is a pain and, besides, most people are afraid of IRS love notes. Best to get your employer to issue an Amended W-2.. Think of this as your chance to educate him of the finer points of tax law.
Anyway, that's me two cents worth,
