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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Question on an 1120s for a restaurant.. when entering the

Customer Question

Hello,
JA: Hello. How can I help?
Customer: Question on an 1120s for a restaurant.. when entering the wages paid to employees.. do you enter the total amount of box 1.. even though this box includes tips that did not run through the business?
JA: The Expert will know how to help. Please tell me more, so we can help you best.
Customer: box 1 is different than box 3
JA: Is there anything else the Expert should be aware of?
Customer: box 3 represents the amount the employer paid.. the box 7 is tips the employee reported
Submitted: 1 month ago.
Category: Tax
Expert:  Lev replied 1 month ago.

Question on an 1120s for a restaurant.. when entering the wages paid to employees.. do you enter the total amount of box 1.. even though this box includes tips that did not run through the business?

Tips must be included into gross business income.

"did not run through the business" is not correct interpretation...

Tips will be included into gross business income in additional to invoices.

When you deduct wages - you include the total amount from W2 box 1, but there might be additional amounts withheld from wages - contributions into retirement plans, employees' portion of medical insurance withheld from wages, etc.

So potentially the amount of deducted wages could be more than the total amount from W2 box 1.