How to enter tip deduction

[Chap123]

My employer did not separate reported tips, they are all in box 1. They stated they will not be sending out corrected W2’s but advised me to look at final paystub for tip info. Do I leave boxes 1, 3 and 5 with what is reported on the W2 and then put the reported tips in box 7 or do I adjust boxes 1,3 and 5 minus the tips and put the reported tips in box 7?  Thanks 

[JamesG1]

Your situation is addressed in this TurboTax Help.

Tip income must be reported as income in box 1 of the W-2 so that the qualified tip deduction may be taken.

Currently, employers are not required to list tips separately on your W-2. If your employer did not report your tips in Box 7 (Social Security tips) of your W-2, you may still be able to claim the tips deduction.  Follow the steps below based on your situation to claim the deduction. 

Some employers may report qualified tips in Box 14 instead of Box 7. 

1. Enter your W-2, including exactly what appears in Box 14.
2. After entering your W-2, look for the Review and complete your box 14 info screen.
3. For the line with tips, select Reported tips (not railroad tips) from the list.
4. TurboTax will ask you a few questions about your tips, and automatically calculate the deduction if you qualify.

[Chap123]

There is nothing in box 14. I have the tip amount that I was paid, based off of my final paystub. My question is 1. do I subtract the amount of the tips from box 1,3 and 5  and then insert the tips into box 7? 2. do I leave the wages as they are in box 1, 3 and 5 and insert the tips into box 7? I wasn’t sure if I do option 1 or 2.  Thanks 

[JamesG1]

The TurboTax Help addresses tip income reported only in box 1 and in no other box of the W-2.  

TurboTax is working on an update for this specific scenario to help you separate your tips from your regular wages. Please check back in February. TurboTax will be updated then to ask you the necessary questions to calculate your deduction.

It is not recommended to alter the information that is reported on your W-2.

You have tips in Box 1 (with wages) but not listed in Box 7 or 14

In some cases, your employer may have included your tips in your total wages (Box 1) but didn’t separately list them into Box 7 or Box 14. You might have to independently determine your tips. 

If you're manually breaking out tips from Box 1, make sure the amount you claim matches the tip reports (Form 4070 or similar form) you gave your employer during the year, or your own daily tip log. And of course, make sure you’re eligible for this deduction.

TurboTax is working on an update for this specific scenario to help you separate your tips from your regular wages. Please check back in February. TurboTax will be updated then to ask you the necessary questions to calculate your deduction.

[edevans74]

Hi! I am running my son's taxes for him and he has this exact scenario where tips are lumped into box 1 and shown nowhere else on his W-2.  He does have the total for 2025 shown on his final paystub of the year.  Is there any news on when to expect the update to TurboTax to support this? Thanks!

[Vanessa A]

You can enter the tip total in box 7 of the W-2.  This will not affect anything else, but it will allow you to get the questions needed regarding tips and deduct the tips.  You can use the total from the last paystub to enter in box 7.  

The IRS is giving a little leeway this year as this is all new and there has not been a standard way that employers were told to report tips and overtime. So adding the amount in box 7, is currently the easiest way to complete the taxes and deduct the tips.   

[edevans74]

Thank you, Vanessa! I wasn't sure if that was allowable but with your reassurance I'll go ahead and get it done! I appreciate the help.