|
Case Study (continued)
If Fred did report his tip income to his employer, the tips would be included in box 1 of the Form W-2 that he received from the barbershop. The amount in box 1 of that Form W-2 would be $2,150 ($1,950 plus $200). Fred would still enter $25,650 on line 7 ($23,500 plus $2,150).
Taxpayers should keep a copy for their records.
| Repairman W-2, box 1 |
$23,500 |
| Barber W-2, box 1 |
$1,950
+ 200
$2,150 |
| Barber Unreported Tips |
$200 |
| Form 1040A, line 7 |
$25,650 |
|
 |
 |
