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How do I file for taxes as a tipped employee?

It's only giving me the standard deduction of $15,750 and not the total $25,000 deduction. I need to finish filing and am getting fairly frustrated with our systems.
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2 Replies

How do I file for taxes as a tipped employee?

The no tax on tips does not increase the standard deduction.  If you had tip income and it was reported in box 7 of the W-2, then the extra deduction would be calculated on Schedule 1-A automatically by the TurboTax program.   The amount of the deduction would flow to the Form 1040 Line 13b.

 

Look at your Form 1040 -

You can view your Form 1040 plus Schedules 1, 2 and 3 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

JamesG1
Expert Alumni

How do I file for taxes as a tipped employee?

If the Qualified tip deduction has been entered, it may be viewed on Schedule 1-A, lines 5-13 and on line 13b of the IRS form 1040.  

 

The Standard Deduction reported on line 12e of the IRS form 1040 does not change.

 

In TurboTax Online, within the W-2 entry screens, at the screen Let's check for other situations, you are allowed to report Tips not reported on my W-2.

 

The qualified tips must be paid voluntarily without any consequence in the event of nonpayment, is not the subject of negotiation, and is determined by the payor.

 

The maximum annual tip deduction is $25,000, which phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).  The qualified tip deduction is not available for a taxpayer who is married and files separately.


See also this TurboTax Help.


In TurboTax Online, follow these steps to view your income tax return. 

 

  • Down the left side of the screen, click on Tax Tools.
  • Click on Tools.
  • Click on View Tax Summary.
  • Click on Preview my 1040.

@bradley-kleeman 

 

 

 

 

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