Payroll ?

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  • Donanita
    Senior Member
    • Aug 2005
    • 250
    #1

    Payroll ?

    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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    • Greenbriar
      Senior Member
      • Jun 2007
      • 189
      #2
      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.

        Comment

        • taxmandan
          Senior Member
          • Oct 2005
          • 1037
          #3
          Originally posted by Donanita
          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.
          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.
          "A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain

            Comment

            • Bees Knees
              Senior Member
              • May 2005
              • 5456
              #4
              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.

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