Do I still owe taxes on tips after former employer claims to have paid taxes and didn't include tips as part of income on W-2?

[hopeisgr8]

I worked in a family-owned restaurant for nearly 2 years, and I received tips in addition to a regular paycheck. Recently, I found out that tips are taxable income and should be reported when doing taxes. I just asked my former employer about it, and she told me that she took care of the taxes and didn't include tips as part of the income on any of my W-2s. Was that right? I don't want to end up being in trouble with the IRS.

[Bsch4477]

Yes, you have to report tip income. 
https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-forms/enter-unreported-tips/L0BGoGCZ...

[hopeisgr8]

• Also, when I talked with my former employer, she seemed to say that circumstances for paying taxes on tips were different for her business than for a place like Olive Garden (where servers would be paid much less than minimum wage and apparently make more in tips in one day than I would make in a single week). At this former job, I was at minimum wage at first but got a couple of raises during my time of employment.

[hopeisgr8]

Here's another thing that might be helpful. My old boss also handled the payroll using Intuit Payroll (maybe Quickbooks, not sure about that), and she calculated how much I and my co-workers would get in tips each week (based on how many hours we had worked). I did get some direct tips from customers, but I believe it was always less than the $20/month that had to be reported to the employer. At the very least, I should probably amend previous returns because of those extra tips.

[KrisD15]

Some restaurant owners are required to have their employees report tip and tip sharing so that they can report those tips on the W-2 of the employee. They can also get the tip amount from credit card receipts from sales paid by credit cards. 

It is the responsibility of the employee to report tips on their federal return. 

You'll need to determine if the tips you received were reported on your W-2 or needed to be added as income on your tax return. 

If they needed to be added, and will result in added tax liability or refund, you must amend the prior year tax returns and claim the tip income. 

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