(I warned you)
Background: on a W-2 form, for some reason, tips and wages are separated out for Social Security (i.e., if your taxable wages were $5000 for the year, there will be a box that says that your Social Security wages were $1000 and Social Security tips were $4000).
So, I got a call today from a tax preparer (not an employee of ours, not H&R Block, but a real live tax professional) complaining that we had to refund Suzy Server $400 in Social Security tax because we had withheld too much and we also had to print an amended W-2 for Suzy.
(I get this one a lot although I always act surprised when it comes up so the caller doesn’t feel dumb).
(Avg. number of times I get this question per year = 5. Avg number of times I’m wrong and have to refund anything and print an amended W-2 = 0).
(Oh, and for the record I do not do my own taxes. Our former neighbor is a CPA so once a year I drive to his office and shove an envelope of stuff in his mailbox).
Anyway, back to my tale. Tax professional insists – inSISTS – that we were not to have deducted Social Security from the tip portion of Suzy’s earnings. She knows so because Turbo Tax says so.
What kind of tax professional doesn’t know this because she’s a tax professional and but because a computer program tells her so. (Ugh, there is probably some hypocrisy in that sentence, but I’ll let you find it). “I can file it but they’ll reject it!” she tells me super huffily.
At this point I feel terrible for our employee, who just wants to get her damn refund, but made the mistake of entrusting her tax preparation to a tax professional who apparently knows not a damn thing about taxes. Really unfortunate. I feel like I should try to call the employee and say “Get away from this lady! You will end up in biiiig trouble!” But all I tell The Professional is “We have withheld appropriately,” which is true.
(Really. I had this same scenario crop up last week – not with a Professional but with a regular person like you or me – and I managed to explain to her the concept of adding SS wages to SS tips, so why can’t a real live Tax Professional “get” it?)