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I work at a restaurant where I give the bartender and barback 18% of my tips, but I pay taxes on that money, how to I claim that I dont have that money

 
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1 Reply
rjs
Level 15
Level 15

I work at a restaurant where I give the bartender and barback 18% of my tips, but I pay taxes on that money, how to I claim that I dont have that money

You are supposed to subtract the tip-outs before you report your tips to your employer. The tips you report to your employer should be only the amount you actually kept. The amount you tipped out should not be included in your W-2. If your W-2 includes the full amount of tips that you received, before subtracting tip-outs, you should ask your employer to issue a corrected W-2 that does not include the amount you tipped out. There is no way to subtract tip-outs on your tax return.

You should read IRS Publication 531 for all the details of how to report tips. You can download it from the following link on the IRS web site.

https://www.irs.gov/pub/irs-pdf/p531.pdf

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