4137x Review

: Tips under $20 in a month don't need to be reported to your employer, but they still must be included as income on your Form 1040 . Filing Mechanics

: If your W-2 Wage and Tax Statement shows an amount in Box 8 (allocated tips), you must report this as income on your 1040 and use Form 4137 unless you have adequate records proving you received less . : Tips under $20 in a month don't

: If you received $20 or more in cash and charge tips in any calendar month and did not report the full amount to your employer . : Failure to report required tips to your

: Failure to report required tips to your employer can lead to a penalty equal to 50% of the Social Security and Medicare taxes due on those tips . About Form 4137, Social Security and Medicare Tax On

: You must maintain a daily tip log or other adequate records to support the figures reported on the form .

: Unreported income is not credited to your Social Security history, potentially lowering your future monthly benefit payments .

About Form 4137, Social Security and Medicare Tax On ... - IRS