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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:
  1. 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
  2. Click on Other Income in the middle of the screen to expand the category, then click Taxes on tip income
  3. Click Yes on the screen titled Other Income - Unreported or Allocated Tips

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