Client called and is hiring 3 employees. Said that they would have tips and hourly pay. I am looking for information for reporting the tips. Isn't there a form that the employer has to file with the IRS for the tips and when would you have to allocate tips on their w2. This is my first time dealing with employee tips.
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IRS Website
You can go to irs.gov and enter tips in search field. Brings up all kinds of info and FAQ's about reporting tips. -
Yes, there are forms that must be completed to report the tips so the employer can withhold for FICA on those amounts. Greenbriar is right, check out the IRS website for a primer on the handling of tip income.Originally posted by Donanita View Post"A man that holds a cat by the tail learns something he can learn no other way." - Mark TwainComment
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See TheTaxBook, page 3-22, Tip Reporting. It tells you to use Form 4070A in IRS Pub 1244 to keep track of tips.
It also explains the allocated tip rules.Comment
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