I really need advice! I am a waiter. At the end of every shift I hand in a sales report to my employer that shows all of my credit card and and cash tips received. I also clock in and out every shift. However, I just received my w2 and there are some major issues concerning reported tips by my employer and my hourly wage ($2.23) that should be filtered through payroll. My recorded wages in box 1 on my w2 totaled $435.90 (extremely low) with next to no taxes taken out. I asked my employer what was going on and she informed me that she only reported $435.90 and that her accountant says i need to claim an additional $22,000 dollars in the unreported tips section of my tax return which took me from getting a return of 4k to now owing $1,300. I also learned that the wait staff was not being processed through payroll after a co worker requested a pay stub to verify her income for something. Normally server payroll checks are 0 dollars because our hourly wage all goes towards taxes, so I was never concerned about not receiving my usual 0 dollar payroll check like I had from previous employers. Turns out she was just writing us personal checks every week that came straight out of her business' bank account that only included what I made in tips, and not my $2.23 an hour. So not only do I now have to claim $22,000 of reported income as unreported, but also have not received my $2.23/hour the entire time I've worked there which basically means I'm going to end up paying my hourly wage out of my own pocket to the IRS since the business failed to process us through payroll and put that money towards my taxes. Is this some sort of legal loophole in which I just have to bite the bullet and pay up? If not, how do I fight this to make sure I'm neither audited or paying the IRS money that I shouldn't have to? Please help! Any information would be greatly appreciated.
