2021 – 03/30 Food and beverage establishments may be able to get a tax credit for their employees’ tips. The credit is for the Social Security and Medicare (FICA) taxes the employer paid on the employee’s tip income. After employees report their tips to you, you must withhold and remit their share of FICA taxes and also pay the employer’s share. The credit is claimed as part of the general business credit. It’s equal to the employer’s share of FICA taxes paid on tip income in excess of what’s needed to bring the employee’s wages up to $5.15 per hour (the minimum wage on Jan. 1, 2007). If you pay each employee at least $5.15 an hour (excluding tips), you needn’t be concerned with this calculation.
Similar Posts
Building customers’ trust in your website
2021 – 02/17 The events of the past year have taught business owners many important lessons. One of them is that, when a crisis hits, customers turn on their computers and look to their phones. According to one analysis of U.S. Department of Commerce data, consumers spent $347.26 billion online with U.S. retailers in the…
Bad Checks and the IRS
2020 – 08/24 Due to delays in processing, the IRS is providing relief from bad check penalties for dishonored checks it received between March 1, 2020, and July 15, 2020. The IRS says that if a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog…
The election to apply the research tax credit against payroll taxes
2022 – 02/28 The credit for increasing research activities, often referred to as the research and development (R&D) credit, is a valuable tax break available to eligible businesses. Claiming the credit involves complex calculations, which we can take care of for you. But in addition to the credit itself, be aware that the credit also…
Employee or Independent Contractor
2021 – 02/26 Is your new worker an employee or an independent contractor for federal income and employment tax purposes? Correct classification can be tricky, but the potential penalties for misclassification are high. If a worker is an employee, you must withhold federal income and payroll taxes, pay the employer’s share of FICA taxes on…
Retroactive Tax Provisions
2022 – 02/07 With the Build Back Better (BBB) Act in limbo, Senate Finance Committee Democrats are reviewing tax provisions included in the bill to head off possible retroactivity issues. “We’re going back through the provisions … and thinking through where effective dates might need to move,” a tax policy advisor told the American Bar…
IRS: Natural Disasters & Personal Records
2021 – 08/12 Protect your financial well-being in case of a natural disaster, warns the IRS. When disaster strikes, quick access to your personal records is crucial. While there’s time, follow these tips. Review and update your emergency plan annually. Create electronic copies of documents, such as bank statements, tax returns and insurance policies, and…
Building customers’ trust in your website
2021 – 02/17 The events of the past year have taught business owners many important lessons. One of them is that, when a crisis hits, customers turn on their computers and look to their phones. According to one analysis of U.S. Department of Commerce data, consumers spent $347.26 billion online with U.S. retailers in the…
Bad Checks and the IRS
2020 – 08/24 Due to delays in processing, the IRS is providing relief from bad check penalties for dishonored checks it received between March 1, 2020, and July 15, 2020. The IRS says that if a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog…
The election to apply the research tax credit against payroll taxes
2022 – 02/28 The credit for increasing research activities, often referred to as the research and development (R&D) credit, is a valuable tax break available to eligible businesses. Claiming the credit involves complex calculations, which we can take care of for you. But in addition to the credit itself, be aware that the credit also…
Employee or Independent Contractor
2021 – 02/26 Is your new worker an employee or an independent contractor for federal income and employment tax purposes? Correct classification can be tricky, but the potential penalties for misclassification are high. If a worker is an employee, you must withhold federal income and payroll taxes, pay the employer’s share of FICA taxes on…
Retroactive Tax Provisions
2022 – 02/07 With the Build Back Better (BBB) Act in limbo, Senate Finance Committee Democrats are reviewing tax provisions included in the bill to head off possible retroactivity issues. “We’re going back through the provisions … and thinking through where effective dates might need to move,” a tax policy advisor told the American Bar…
IRS: Natural Disasters & Personal Records
2021 – 08/12 Protect your financial well-being in case of a natural disaster, warns the IRS. When disaster strikes, quick access to your personal records is crucial. While there’s time, follow these tips. Review and update your emergency plan annually. Create electronic copies of documents, such as bank statements, tax returns and insurance policies, and…
Building customers’ trust in your website
2021 – 02/17 The events of the past year have taught business owners many important lessons. One of them is that, when a crisis hits, customers turn on their computers and look to their phones. According to one analysis of U.S. Department of Commerce data, consumers spent $347.26 billion online with U.S. retailers in the…
Bad Checks and the IRS
2020 – 08/24 Due to delays in processing, the IRS is providing relief from bad check penalties for dishonored checks it received between March 1, 2020, and July 15, 2020. The IRS says that if a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog…
The election to apply the research tax credit against payroll taxes
2022 – 02/28 The credit for increasing research activities, often referred to as the research and development (R&D) credit, is a valuable tax break available to eligible businesses. Claiming the credit involves complex calculations, which we can take care of for you. But in addition to the credit itself, be aware that the credit also…
Employee or Independent Contractor
2021 – 02/26 Is your new worker an employee or an independent contractor for federal income and employment tax purposes? Correct classification can be tricky, but the potential penalties for misclassification are high. If a worker is an employee, you must withhold federal income and payroll taxes, pay the employer’s share of FICA taxes on…
Retroactive Tax Provisions
2022 – 02/07 With the Build Back Better (BBB) Act in limbo, Senate Finance Committee Democrats are reviewing tax provisions included in the bill to head off possible retroactivity issues. “We’re going back through the provisions … and thinking through where effective dates might need to move,” a tax policy advisor told the American Bar…
IRS: Natural Disasters & Personal Records
2021 – 08/12 Protect your financial well-being in case of a natural disaster, warns the IRS. When disaster strikes, quick access to your personal records is crucial. While there’s time, follow these tips. Review and update your emergency plan annually. Create electronic copies of documents, such as bank statements, tax returns and insurance policies, and…