Larry, I work for a salon and the owner won’ t let us report out tips. I attended one of your classes and I showed her the information but she says that she does not want to report tips. I really want to do my personal return correctly. I have over $6,000 in tips that I received this last year. There are 10 of us in the salon and most of us think like me. What can I do?
Sally
Sally, good for you. I am always impressed when I meet someone that is trying to follow the rules. It is easy for you to report your tips. There is a Form 4137 that you can fill out. Here is a link.
http://www.irs.gov/pub/irs-pdf/f4137.pdf
For your information, your employer may get an unpleasant surprise. The IRS is launching a new campaign to collect unpaid FICA tax on tips. It is sending out bills to employers for their share of FICA tax on unreported tips, using data collected from Forms 4137. The IRS will send letters to these firms telling them how much they owe and instructing them to include that amount with their next scheduled payroll tax deposit. Those that do so will be exempt from any interest or penalty on the back taxes. As you can see by the form, the employer's information is on the Form 4137.
Best of luck.
Larry Kopsa CPA
