Can I Not Claim a W2
Employees in the food and beverage industry should receive an annual W-2 from their employers that include reported and allocated tips on the W-2. As a waitress, you fall into this category. Your employer puts your total compensation and taxes paid during the year on your W-2. Compensation includes your reported tips.
Wages and Reported Tips
Box 1, which is the Wages, Tips, Other Compensation section of your W-2, shows your reported tips and wages earned for the tax year. Your employer puts your annual withholding for federal income tax in Box 2 of the W-2, your Social Security withholding in Box 4, your Medicare withholding in Box 6, your state income tax withholding in Box 17, and your local income tax withholding in Box 19.
Allocated Tips on W-2
As of 2021, if all employees' tips reported to your employer equal less than 8 percent of gross sales, your employer must allocate the difference between the tipped employees. The allocated tips percentage depends on your portion of gross receipts or total hours worked, or on a written agreement between you and your employer. Your employer puts your allocated tips in Box 8 of the W-2, but it does not withhold any tax on those tips since you did not report them.
According to the Jackson Hewitt website, allocated tips must be reported on your tax return to pay the IRS for owed taxes that weren't withheld from allocated tips. You will have to calculate and pay income, social security and Medicare taxes on allocated tips included on your W-2. Your Medicare and social security allocated tips calculation is determined using IRS Form 4137, Social Security and Medicare Tax on Unreported Tip Income.
Insufficient Withholding
If your wages and reported tips are not enough for tax withholding, your employer can deduct the unpaid tax from your next paycheck. You can give your employer the money toward the end of the year to pay the remaining taxes due. If you fail to give your employer enough money to cover the withholding amount due, your employer can apply your regular wages and reported tips to the unpaid amount in the order that the IRS mandates.
If the withholding stays uncollected by year-end, the IRS can charge you a penalty for underpayment of estimated taxes. Your employer should put your uncollected Social Security and Medicare taxes in Box 12(a) and Box 12(b) of your W-2. When you file your tax return with the IRS, you report the uncollected amount as an additional tax.
Employee Reporting
If you receive $20 or more per month in tips, you must report your total tips received to your employer in writing by the 10th day of the next month. You do not have to report tips of less than $20 to your employer, but they are taxable. Report unreported tips, plus the value of any non-cash tips, such as passes and tickets, to the IRS and pay the taxes due. Depending on your state and local government, the same thing may apply when you file your state and local tax return. You can use IRS Form 4070A to track your daily tips and Form 4070 to report tips to your employer.
Source: https://work.chron.com/employer-put-waitresss-tips-w2-15004.html
0 Response to "Can I Not Claim a W2"
Post a Comment