Tips -> W-2 -> 1120

[ILLMAS]

Is there any instances where W3/W2 box 1 wages shouldn't tie to a tax return (officer/wages)?  I reviewed a tax return and the wages on the 1120 are less than box 1 of the W3/W2, according to the TP, he was told he is not supposed to report tips because it's not his expense.  This was not a self-prepared return, he paid someone to prepare it.

[Lee B]

If you are saying that he is an officer of a C corp and he is reporting tips that he received due to being an employee of the C Corp,

then he is correct.

[ILLMAS]

No, it's the tip portion the waitresses received that is not being reported on the tax return, 941's & W3/W2's match, just the wages are under reported on the tax return significantly.

 

[Evan S. Golar]

The tip portion the waitresses received is not an employer expense.

Only the employer's portion of the FICA/Medicare on the tips is an employer payroll tax.

[jklcpa]

... and the payroll tax expense deduction must be reduced by the amount from line 4 of the form 8846, which is the employer's share of fica and medicare taxes on the tips used to claim the tip credit.

[WITAXLADY]

are you talking his own W-2? does it balance out with box 7 as tips then..

the rest should still balance...

Or in a new restaurant I have- she is not claiming the additional tips or credit cards tips coming thru the till  - says they are hers... and not going anywhere - different scenario!  As I said they need to show as her income - other...