social security on tip income

[EileenDC]

One of my clients has tip income entered in box 5 of his W2.  I've entered it into Proseries but the program doesn't seem to calculate the additional taxes which are due on his tip income.  Medicare taxes were withheld for the full amount on income (wages plus tips) b

[IRonMaN · Accepted solution]

If the W-2 was prepared correctly, you shouldn't have to do any extra gymnastics.

[Just-Lisa-Now-]

Wages in boxes 3 and 7, when added together should have the 6.2% of the total showing in Box 4 of the W2.  If its not correct, its the employer that will need to correct with IRS...and unless your client has excess SS (multiple W2s that exceed the SS limit) you dont need to worry about it on the tax return.

[TaxGuyBill]

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@EileenDC wrote:

One of my clients has tip income entered in box 5 of his W2. 

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Do you mean Box 7?  If you enter Box 3 and Box 7, ProSeries should auto-calculate the amount in Box 4 (assuming you have the check box checked).

[dd4vols]

Your client would only pay taxes   on "unreported tips.. (Form 4137).  If they are on the W2... ergo...they are not unreported.

[mkenison]

I finally found the entry for social security tax on tips, form 4137, but it says it's an override and makes the return not available for efile.  Is there any way around this so we can efile it?