If you are entering an amount in box 8 of the W-2 for Allocated Tips, this amount will transfer to Line 1 of Form 4137 for the calculation of social security and Medicare tax on the tips to be reported on Line 57 of Form 1040. The amount in box 8 is not included in box 1 wages of the W-2.
If you received other unreported tips, then this amount would also need to be entered in the Q&A for Form 4137.
To access the Q&A for Form 4137:
- From within your TaxAct® return (Online or Desktop) click on the Federal tab. On smaller devices, click in the upper left-hand corner, then select Federal
- Click on Other Income in the middle of the screen to expand the category, then click Taxes on tip income
- Click Yes on the screen titled Other Income - Unreported or Allocated Tips