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New Member
posted Feb 16, 2022 8:28:03 AM

I received a 1099 for tips earned in conjunction with my job for which I received a W2. Do I have to pay self employment tax and file Schedule C?

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1 Replies
Expert Alumni
Feb 16, 2022 8:53:20 AM

No, your tip income should have been included on your W-2.  You should contact your employer to get a corrected one that included tips on your W-2. If your tips were more than $20 per month, your employer should have withheld taxes including social security taxes. 

 

"Employers are also required to withhold taxes (including income taxes and the employee’s share of social security tax and Medicare tax) based upon wages and tip income received by the employee and to deposit this tax.  In addition, employers are required to pay the employer share of social security and Medicare taxes based on the total wages paid to tipped employees as well as the reported tip income. This information and tax is finally reported to the IRS on the appropriate forms by the employer.

 

Tips reported to the employer by the employee must be included in Box 1 (Wages, tips, other compensation), Box 5 (Medicare wages and tips), and Box 7 (Social security tips) of the employee's Form W-2, Wage and Tax Statement. Enter the amount of any uncollected social security tax and Medicare tax in Box 12 of Form W-2." Employee Tips