<p>I have a problem. On my college applications, I wrote that I worked between 20 and 25 hours each week in 2004, which is true. On financial aid forms, I wrote that my tax forms will show that I made a couple of thousand dollars, which is also true. The problem is that I should have made an extra couple of thousand if I had worked that much. The situation is this: I made most of the money that will show up on tax forms working in a restaurant. Then, I was moved to a different job (busboy) at the same place. Of course, the tiny amount of hourly wage I made as a busboy will show up and complete the tax form income. I made the rest of my money in 2004 through tips. I dont know how restaurant business works, but the owner told us (servers and busboys) that only very small amounts of our tips will be kept on record and taxed. Somehow, he said, it would help the restaurant get back on its feet. I knew it was wrong at the time, but I had tried so hard to find a job, and waited so long to not be a dishwasher, and I didnt want to lose the job. I couldnt afford to lose it. I know I messed up by not demanding to be taxed or walking away.</p>
<p>So, my question. Is application and fin. aid info coordinated closely enough for the income that is lower than expected to be noticed? If it is, then I really do fear that it will be naturally assumed that I grossly exaggerated my working hours on the application. Obviously, that would be very dishonest and one could naturally expect to have all offers of admission denied or rescinded if this occurs.</p>
<p>Should I preemptively write a letter to each school, explaining all of this and pleading for empathy? That would run the risk of unnecessarily alerting the school of my terrible judgment in regard to the tax situation, and being denied admission anyway.</p>
<p>Im very upset and I fear that, in either case, this might be the end of any college plans I had. Not that I wouldnt deserve it, however.</p>
<p>I am not a financial expert.
However I don't understand how not reporting your tips would help the business.
The way I understand it, IRS assumes that you will make a baseline amount of tips and if you don't report it, they may inquire further.
Hmm this website says that restaurants are required to pay a certain amount of FICA taxes depending on employee earnings so if employees under report tips then the restaurant pays less .
<a href="http://www.restaurant.org/legal/tips/agreements.cfm%5B/url%5D">http://www.restaurant.org/legal/tips/agreements.cfm</a></p>
<p>I suppose that could have been how it helped, though it doesn't sound like it would have amounted to much. Thanks for the information, but whatever the damage may be, it's already done.</p>
<p>I don't think that you are in terrible trouble. This, unfortunately, happens a lot. I have told my kids not to work at places where the pay is under the table, but even with that as a rule, there is often cash exchanged for ancillary services that does not go through the official payroll process. If a place if outrageously cheating on its taxes, it is not the place to work, as you can get yourself in trouble if they are caught, audited and your name comes up. Not to mention that they are breaking the law and are tax cheats. But many teenagers find themselves getting tips, neighbor contributions, babysitting money, dog walking remuneration that may not have been tracked to the penny. As another poster mentioned, it is doubtful that financial aid is going to track down money from such jobs. However, if you have a large discrepancy between your jobs last year and the money you earned because the employer, in your case that restaraunt did not legally report the money to the IRs, it does not excuse you from not reporting it on the financial aid forms such as FAFSA, Profile or other college forms. It is up to you to come up with some best guess amount if you did not keep track.</p>
<p>Thanks. So, would I put the general amount of the tips into the "Other Untaxed Income" questions on the Profile and FAFSA?</p>
<p>I've already filed both of those forms. The FAFSA clearly has a place to change the information online, but I'm unclear as to how I change the information on the Profile. Knowing College Board, it's bound to be much more difficult.</p>
<p>My understanding with Profile is that you must let each college know of the correction. The easiest way to do this is to print out a copy of what you submitted and add the corrections in red fine line marker. Then send a copy with a short cover letter to the financial aid office of each school. Believe me, they will make those corrections. That way the numbers will be in sych with the corrected FAFSA.</p>
<p>Thanks for all your help.</p>
<p>A small off-shoot question, however-- do schools correct the 2004 estimates on their own using the copies of tax forms that come later, or do we send those in? In this situation, I need to know because I don't know whether I should wait to send in my tip income correction so that I can send in the 2004 actual figures with it, or send the tip correction immediately.</p>
<p>To-do list, just to be sure:
-Wait for the FAFSA to fully process, correct online.
-Send copies of Profile with corrections to all schools through snail mail.</p>