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I am doing bookkeeping for a restaurant, are the tips received and reported by the waitress taxable for unemployment purposes?

By: Rick Gossett

 

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I am doing bookkeeping for a restaurant, are the tips received and reported by the waitress taxable for unemployment purposes?

Answer:
Tips reported by a restaurant waitress to an employer are taxable for unemployment tax calculation purposes, subject to certain thresholds and guidelines. Also, there are additional tax treatment considerations for different types of food service businesses and tip and gratuity procedures that, as a professional bookkeeper, you may want to be familiar with. You can review tax industry and IRS information regarding payroll taxes and other tax implications for tipped employees at the following websites:

IRS information:

Published: September 15, 2014
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Rick Gossett

As COO of Tarkenton Companies for more than 20 years, Rick has been responsible for business software development, unique partnerships, business educational content and consulting, and more. Rick was the originator of Tarkenton Companies’s consulting service and initially handled all of the questions himself. Prior to joining Tarkenton Companies, Rick owned and operated a private practice as a CPA. Prior to that, he was a Senior Manager at Pannell Kerr Forster in tax and audit, as well as Principal in Ernst & Young's small business advisory group.

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