Waitress W2

[S T]

I am not sure

B

I worked the W-2 figures in my software program and arrived at the same numbers for SS and Mcare, and my program did not alert me to do anything in regards to filing form 4137, etc.

SS came up 434 and Mcare came up the 145, based on box 3 and box 5, my software automatically does the SS and Mcare calc and then I can override if need be.
I entered 3,000 for box 7 and nothing changed.

I even tried to manually do a 4137, and it still reported -0-
I entered 12a and software entered UT = 186 on line 60

I found a W-2 on one of my clients that had the same type of reporting as yours. That
W-2 for box 4 = SS amount calculated on Box 3 + Box 7

Maybe you should call the t/p's employer and ask why box 4 isn't being calculated correctly.

Sandy

[BHoffman]

Sandy - thanks for your advice. I think box 4 is correct. I think the wages paid to the employee were insufficient to pay the SS on the employee's reported tips. Still trying to sort this out. Thanks you guys for helping.

[JG EA]

I think you are correct. However, I'm wondering if this is the result of any error or not. I don't think so. I think the employee reported tips to the employer, and the actual paid wage amount was insufficient to cover the SS withholding.

I figured this was some easy and common thing that you all had seen a million times!

I believe that would be a box 12 entry Code A and B and then the employee would pay on his tax return.

Commom: For SS/Med to be wrong but not off by $186.

[BHoffman]

JG - that's what has me stumped. I could understand if I saw something in box 12 code a, but there isn't anything. That may be an error on the W2, but the withholding percentage math works out OK. How weird this is....perhaps a nice bowl of ice cream is in order.

[Gene V]

I been getting these W2’s like BHoffman got for a long time—I just look at some this year, already got 4 and all from different restaurant.
Will have to check with some payroll company and see why they issue them this way.

[BHoffman]

Hey, I just remembered. I have a good buddy who prepares payroll for living and does W2s for restaurant employees. He will probably know! I'll ask him in the morning.

[Possi]

tip income

I was just searching "tip" income on the board and I see that there was some confusion about reporting tips.

Enter the W2 exactly as it is. Social Security tips need no special treatment.

If there are ALLOCATED TIPS in box 8, the 4137 will come up.

Restaurants must report a certain percentage of tips to sales. (8%)

If the staff doesn't report the minimum tips to sales, the restaurant must "allocate" tips, or "force" tip income on the staff.

If the establishment's tips are routinely low, the staff (client) can get around reporting "allocated" (Box 8) tips, and we as preparers do NOT need to include them on the w2 IF A DAILY TIP RECORD has been kept by the client to prove the allocated tips are not true.

Also is true with "tipping out" or sharing tips at the end of the night. Tip records must be kept if the client is not reporting "allocated" tips from the W2.

I hope this helps. I'm not often much help here, but I am familiar with this topic.

This is from the IRS website:

Question: Of my allocated tips, I tip-out 15% to the busboy and 5% to the bar. Where do I deduct this on my tax return?

Answer: You cannot deduct tip-outs (the tips you split with other employees) on your tax return. Nor can you deduct them from your allocated tips:

*
The practice of tipping-out is one of the reasons you should keep a detailed daily log of your tips.
*
If you documented that you tip-out, and you reported all your tips to your employer, then you do not include in your income the allocated tips in box 8 of Form W-2 (PDF).

Tipping-out, by itself, should not cause an allocated tip situation:

*
When you report the cash tips you receive, you should first report the total tips, then the amount tipped-out. Publication 1244 (PDF), Employee's Daily Record of Tips and Report to Employer, includes Forms 4070 and 4070A, Employee's Report of Tips to Employer that provides lines to record:
o
Cash tips received
o
Credit card tips received
o
Tips paid out
o
Net tips
*
The detail of the information provided should enable your employer to develop a reasonable, fair, and accurate method for determining whether tips need to be allocated, and, if so, how much.
*
Employers who operate large food and beverage establishments are only required to allocate tips if the total tips reported by all the employees who customarily receive tips are less than 8% of gross sales.
*
When there is a tip-splitting arrangement, it is important that all tips, including those received through tip-splitting, be reported to the employer by each employee who receives $20 or more in a month.

~possi