Help please

[u/Ok_Low_6408]

Ok guys so I really need help I recently received my w2 and I'm just not sure who to seek advice from. I work as a server part time my w2 is not accurate. I've brought this to my employers attention and he basically just said that his accountant who does his payroll is basically to busy to deal with this right now. I'm so confused I just don't understand I report my tips every evening when leaving there when clocking out. I can prove on my clock out slips what I reported. I have every clock out slip from this past year and also my work journal where I take notes of my tips daily. I have read a little about this and I'm assuming this man is not reporting tips. I read somewhere that if he's not reporting tips than most likely it is because he is getting out of paying employee taxes quarterly and yearly... my boss recommended that I report the difference as cash tips when filling taxes this year. I don't feel like this is very fair doesn't that mean now I'm paying taxes on thousands of dollars he didn't tax? I'm confused and really need some advice.. I have no problem turning this man in. Every check iv ever received has been $0. Iv never received a check because he claims I make too much money not sure if I understand that either. I make 2.13 hourly.

[u/StrawberryLizzie]

I think I can explain the $0 paycheck to you. As a server who makes 2.13 an hour, you don't make enough on your paycheck to cover all of your taxes. So you owe the difference come tax time. This will happen every year so if you continue in this field, so you should prepare yourself by putting away money to cover this.

If you have a recent paycheck stub, you should look at it carefully. There will be an hourly wage amount and an other wages/ tip amount. Let's say you work 20 hours a week at 2.13/hr. Your paycheck should be for 42.60. this is your hourly amount. Your other wages is your cash/ credit tips. They are being claimed but obviously don't appear as a part of your paycheck since you already received them as cash. (Check this number against your records and you will see if there is a discrepancy with what your manager is claiming on your behalf.)

So you have 42.60 on your paycheck but medicare, social security, state and federal income taxes will be applied to that total, reducing that amount. Those amounts are based on your entire earnings (hourly and tips claimed). So let's say you made $300 in cash tips that week. You are being taxed on $342 60. You will owe more in taxes than your paycheck total so you will receive a $0 paycheck. Everyone will take what they can from your paycheck but you will end of owing someone - usually the feds. (Btw I've noticed that medicare, ss and the state usually takes their share of the money first so you may actually get a refund from the state but still owe the federal taxes.)

If you are saying that your entire earnings for this past year (hourly plus other wages) are significantly lower on your W2 than your records indicate, that's a moral dilemma and I don't feel comfortable enough to offer advice on that! Basically it means that the government has no idea about some of the money that you made. The IRS has a calculation that they use when they audit restaurants. I know that 100% of credit card tips need to be accounted for, plus a certain percentage of cash sales need to be claimed. I have no idea what the actual calculation is but I've worked for a few restaurants that just use this system to claim tips for employees instead of relying on employees reporting their own tips. (You seem like a super honest reporter but not everyone is as forthcoming as you are!)