Are Allocated Tips (box 8) double-counted if included in Wages (box 1) on W-2?

This is super helpful, thanks! If my employer is doing this wrong, what should I do about it? Can I just file my taxes based on what I know is right, or do I need to get a corrected W-2 from them?

You should definitely reach out to your employer's payroll department first to point out the discrepancy. Ask them to review how they're calculating Box 1 wages and explain that allocated tips shouldn't be included there. If they agree it's an error, they should issue you a corrected W-2 (marked as "CORRECTED") before you file your taxes. If they refuse or don't understand the issue, you can report this to the IRS and file Form 4852 (Substitute for Form W-2) with your tax return, showing the correctly calculated amounts.

How exactly does this service work? Do you just upload your documents and it tells you if there are errors? I'm having the same issue but my manager keeps insisting it's being done correctly.

Sounds helpful but I'm skeptical about giving my tax docs to some random website. How do you know it's secure and not just harvesting financial info?

You just upload your W-2 and paystubs through their secure portal, and their system uses AI to compare the numbers and check for inconsistencies. It specifically knows tax rules like this allocated tips issue and creates a detailed report showing what's wrong and how it should be fixed. It saved me hours of trying to explain the problem to my boss. For security, they use the same encryption as banks do and don't store your documents after analysis. I was worried about that too, but they explain their security measures pretty clearly on their site. Plus they're SOC 2 compliant which I guess is some security certification for handling sensitive data.

How does this actually work? It sounds like magic - I've literally spent HOURS trying to reach the IRS about my W-2 issues and can never get through.

Yeah right. There's no way to "skip the line" with the IRS. This sounds like a scam to get money from desperate people. The IRS doesn't allow third parties to hold your place or whatever.

It's surprisingly simple - you enter your phone number on their site, and they use their system to navigate the IRS phone tree and wait on hold for you. When they reach an actual IRS agent, they connect the call to your phone. So you're not skipping any line, they're just waiting in it for you. The IRS doesn't even know you used a service - from their perspective, it's just a normal call that gets transferred to you when an agent picks up. It saved me literally hours of hold time. I was finally able to get official confirmation about how allocated tips should be handled on W-2s, and the agent even contacted my employer directly.

Wait so do we pay taxes on allocated tips at all? I thought they were just the restaurant's way of making sure we're reporting enough tips to match their sales ratios or something?

Yes, you do need to pay taxes on allocated tips (Box 8) - they're considered taxable income. The IRS assumes these are tips you received but didn't report to your employer. However, they shouldn't ALSO be included in Box 1. That's where the double-counting problem happens. Box 1 should only include your normal wages and any tips you actually reported to your employer during the year. Allocated tips go only in Box 8, and you'll pay tax on them when you file your return.

TurboTax doesn't automatically detect if your employer made a mistake on your W-2. It just uses whatever numbers you enter from your W-2 form. Your best bet is to get a corrected W-2 from your employer before filing.