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IRS Form 4137: Fill it Out the Best Way

Audrey Goodwin

2024-04-30 10:44:11 • Filed to: Other IRS Forms • Proven solutions

If you work in a sector where it is common to receive a portion of your income from customer tips, then you may need to use IRS Form 4137 to calculate the additional tax you owe on the unreported tax tip.

Your Best Solution to Fill out IRS Form 4137

With just some simple clicks, you can fill out your IRS Form 4137 comfortably and easily. The best way to achieve this is by using Wondershare PDFelement - PDF Editor .

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Instructions for How to Complete IRS Form 4137

How will you complete an IRS Form 4137 if you have one to fill? The answer is simple, Just use Wondershare PDFelement to fill it out without errors. The following is a step by step guide to help you fill the form easily with PDFelement.

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Step 1: The first thing that is required is to obtain the form. You can do this by getting from the IRS office. However, filling it electronically will require you to download a soft copy from the official website of the IRS. Once this is done, kindly open it with PDFelement and start filling it out as required.

Step 2: Write name of person who received tips and the social security number. On line 1, you will have to complete a separate line for each employer. That means if you have a total of 5 employers, they will take the rows form Line 1A to 1E. Write the name of the employer to whom you are required to but did not report all your tips on 1a, the employer identification number on 1b, the total charge and cash tips you received including the unreported ones on line and the total charge and cash tips reported to the employer on 1d.

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Step 3: Enter the total amount of cash and charge tips you received in the year on line 2 by adding the amount on line 1 column c and on line 3, you are expected to enter the total cash and charge tips you reported to your employers in the year by adding the amounts on line 1 column d. To get the amount you must include in the total on form 1040 line 7, you must subtract line 3 from line 2 and enter the result on line 4.

Step 4: Enter on line 5 cash and charge tips you received but did not report to your employer because the total was less than $20 in a calendar month. You can see further instructions for clarity if needed. Then get the unreported tips subjected to Medicare tax by subtracting line 5 from line 4 and enter amount on line 6. However, note that the $118,500 recorded on the form on line 7 represents the maximum amount of wages including tips subject to social security tax.

Step 5: Line 8 is the total security wages and social security tips. See further instructions. Then on line 9, you will have to subtract line 8 from line 7. But note that if line 8 is more than line 7, then you will have to enter 0.

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Step 6: Line 10 represents unreported tips subject to social security tax. You will have to enter the smaller of line 6 or line 9 if you received tips as state, federal or local government employee.

Step 7: Then multiply line 10 by 0.062 which is the social security tax rate and multiply line 6 by 0.0145 which is the Medicare tax rate and enter result on line 11 and line 12 respectively.

Step 8: Then finally, add line 11 and line 12 and enter the result on line 13. Note that this figure should also be recorded on Form 1040 line 58, Form 1040NR line 56 or Form 1040NR-EZ line 16.

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Tips and Warnings for IRS Form 4137

It is important to note that there will be a penalty for not reporting tips. For example, any unreported tip to your employer may lead to a penalty equal to 50% of your social security, Medicare and additional Medicare taxes due on those tips.
You can get additional information on this subject by looking at Pub 531, Reporting Tip Income. See also Rev.Rul. 2012 -2018 for guidance on taxes imposed on tips and the difference between tips and service charges. You can find them at the Internal Revenue service official website.
It is important you give your employer a written report of cash and charge tips of any amount above $20 you received in a month.
The safety of your information and privacy is guaranteed when using Wondershare PDFelement to fill out this form.