In restaurants, waiters, bartenders and bus drivers must report their tips, including cash, to the restaurant and the IRS. Even if these bar tips are not reported to the restaurant because tips are subject to wage tax, the IRS can tax the restaurant for the employer's share of the FICA tax on the unreported cash tips. In this episode of "More with McGlinchey," Douglas Charnas (Washington, DC) discusses the cash tip tax law and outlines the two voluntary IRS programs that the Show more +
In restaurants, waiters, bartenders and bus drivers must report their tips, including cash, to the restaurant and the IRS. Even if these bar tips are not reported to the restaurant because tips are subject to wage tax, the IRS can tax the restaurant for the employer's share of the FICA tax on the unreported cash tips. In this episode of "More with McGlinchey," Douglas Charnas (Washington, DC) discusses the cash tip tax law and outlines the two voluntary IRS programs that significantly reduce the likelihood of a restaurant being taxed for unreported cash tips . Show less –