Unreported Tips

[bestanek15]

My wife has been a bartender for years, most of the time she has had her tips automatically claimed and reported on her W-2. After being out of work for 2020 she was able to get back to work in 2021 however her tips were not claimed on her W-2. We are thinking about taking out a new mortgage this year and would like for her income to more appropriately reflect her earnings. If we entered unreported tips on our 2021 taxes would we be able to use those as income to qualify? Obviously we would then have to pay the tax bill on them but are there any other negative consequences to adding unreported tips? Thanks. 

[Vanessa A]

We cannot give you advice on what will help you get a mortgage.  However, if your wife does have unreported tips, you do need to report them.

You can enter the unreported tips by selecting the following:

• Federal
• Income
• Show more next to Less Common Income
• Start next to Miscellaneous Income
• Start next to Other Income not already reported on a Form w-2