Tip reporting

Thanks for bringing this situation to my attention, LuanneJ,

I'm here to help share information on how QuickBooks populate W2 boxes.

Box 1 of your W2 reports your total taxable wages for federal income tax purposes. QuickBooks calculates the total wages, tips, bonuses, overtime pay, etc., that are subject to federal income tax, and paid to the employee during the reporting year. 

You can verify the QuickBooks result by running the Payroll Item Listing report.

As for Box 7 of your W2, this reports the amount of tip income you reported to your employer. If you did not report tips to your employer, you will not have an amount in this box. The amounts in Box 7 and Box 3 should add up to the amount in Box 1, or the $90,000 maximum wage limit for Social Security taxes.

To verify this information, you can run a Payroll Summary report for the entire calendar year.

Here's a  great resource you can check for more information: W2 form boxes explained.

Keep me posted on how things go concerning W2, I'm always here to help. 

It is my understanding tips should be entered into box 1.  Also when correcting W2s the amount does not hold in the W2c.  The moment I leave the amount disappears and does not print on W2c

Luanne,

Still didn't answer the question...……"Why are my tips being reported on Line 7 of W2 and not included in Box 1?"

Please explain.

Thanks, Kevin

[email address removed]

Hi Kevin,

The way your tips are reported in the W-2 form depends on the selected tax tracking type. It will explain to you how the amount reflects on your forms. Let's check the tax tracking type of the item.

1. From the Lists menu, select Payroll Item List.
2. Double click on the tips item.
3. Click Next till you reach the Tax Tracking type page.
4. See which forms the item affects and how it shows on those forms. Check out the sample below.
   

If you want to make changes in the tax tracking type, please make to consult an accountant and back your company file.

You can always go back to this thread if you additional questions.

Jess T,

That is exactly the way we set them up but unfortunately, Quickbooks did not "Increase wages (Box 1, & 5)" as stated in the description.

Now what?

Thanks, Kevin

Jess,

Also, it doesn't "increase wages on the 941".

What am I doing wrong?

Thanks again, Kevin

We'll just continue what JessT has started, kg_consulting.

After reviewing and correcting the Tax tracking type of the payroll item, we'll run the Payroll Checkup. This is a diagnostic tool that can help us:

• Verify your current setup by scanning your payroll data for missing information and discrepancies.
• Review employee records, payroll item set up and wage and tax amounts.
• Identify tax amount discrepancies on flat-rate tax and will offer suggestion on how to fix the problem.

Before that, we'll create a backup copy of your company file. Now, here's how to run the Payroll Checkup tool:

1. Click Employees at the top menu and select My Payroll Service > Run Payroll Checkup.
2. Follow the prompt instructions and select Continue to proceed to the steps.

You can see the detailed steps in this article: Run payroll checkup.

If there are tax discrepancies in the Data review window, print the report and use it for reference. From there, we can create manual adjustments to correct the wage or tax discrepancies. You can use this link for more information: Entering wage base and tax adjustment to correct employee's quarter (qtd) or year to date (ytd) tota....

If you require a phone support to complete these tasks, you can reach out to our Payroll Support Team.

1. Click Help at the top menu and select QuickBooks Desktop Help.
2. Click the Contact Us button or the QuickBooks support hyperlink.
   You can go to this link as alternative, too: https://help.quickbooks.intuit.com/en_US/contact.
3. Select QuickBooks Desktop as your product.
4. Click the Continue as a guest button.
5. Select the QuickBooks Desktop version you're using.
6. Go to the first section and click the Search for something else button.
7. Enter the details and click Search.
8. Go to the second section and select from the available options to reach them.
9. Enter the necessary details to complete the request.

Let us know the results so we can review what other things we can do help you.