Social Security & Medicare Tax on Unreported Tip Income

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Social Security & Medicare Tax on Unreported Tip Income
Article ID: 34428

Question

Social Security & Medicare Tax on Unreported Tip Income

Answer

If you receive tips of $20 or more in any month and you did not report the full amount to your employer, you must pay the social security and Medicare or railroad retirement (RRTA) tax on the unreported tips. You must also pay this tax if your Form(s) W-2 shows allocated tips that you are including in your income on Form 1040, line 7.

You may be charged a penalty equal to 50% of the social security and Medicare tax due on tips you received but did not report to your employer.

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Views: 635	Created on: Jun 15, 2013 Date updated: Nov 12, 2014
Posted in: OLTPRO WEB SOFTWARE USAGE

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