How to Report Tips

[dsi]

My client is a waitress who receives tips. She also must "tip out" some of her tips to the bus help. However, her employer doesn't reduce her reported tips on her W2. As a result, she is over reporting her tip income.

Is there a way to reduce the tips on her tax return? Even though her W2, box 7 shows she received $XXX in tips?

[sea-tax]

My client is a waitress who receives tips. She also must "tip out" some of her tips to the bus help. However, her employer doesn't reduce her reported tips on her W2. As a result, she is over reporting her tip income.

Is there a way to reduce the tips on her tax return? Even though her W2, box 7 shows she received $XXX in tips?

Interesting situation, I have no facts to support my position but might taking a deduction on line 21 other income work. I mean put the amount of the "tip outs" on line 21 as a negaitve number. Or how about sch a subject to 2%

Like I said just some ideas not sure if they are legit or not . I am interested to see what others say.

[dsi]

That's a good start. What about line 36?

[sea-tax]

That's a good start. What about line 36?

What about it? it appears to be a sub-total line. Like I said I am not sure what I said would work it was just an idea.

Maybe more people who know can respond. Good Luck.

[S T]

Tips to Bus Boys

Somewhere way back when, and I will have to go find it, it was suggested that your tips to bus boys, etc be entered on form 2106 which would flow thru to Sched A misc deductions subject to 2%, or maybe just be entered directly on the Sched A. Of course a lot of the waiters/waitresses won't receive benefit on the Sched A, misc subject to 2%.

Another thought, thinking out loud of course, should the waiter/waitress issue 1099 forms to these bus boys, what a nightmare that would be! However, if 1099 then maybe they could reduce income on line 21

Sandy