Every August, employers who have tipped employees, simply the staff members who take in $20 or more tips in a month on top of their wages, are required to declare it on their tax forms.
And whether you have been in the business for a decade or a month, the process can still get overwhelming, especially as the tax season rolls around.
That is why as the community’s trusted provider of financial services in Pennsylvania, SEIGLER’S TAX & FINANCIAL SERVICES, LLC listed down tips to make sure you are always prepared.
- Know your state’s requirements for tipped employees
Some states require employers to make up the difference in employees’ wages if they did not reach the minimum wage.
- Make use of Form 4070A or Employee’s Daily Record of Tips
This isn’t required at all, but this can make sure that the tips from your employees that you, in turn, will report to the IRS are accurate. This form is given to employees to fill out and submitted every payroll as a ‘tip report.’
- Enlist professional tax and accounting services to handle all your finances
Taxes are complicated, and tax laws undergo alterations, additions, and removals every single year. You can be doing your taxes correctly one time and incorrectly the next.
Sure, learning them by yourself can be a good challenge, but this takes time—time that you could be spending on more important matters such as improving your core services or expanding your market.
By enlisting the expertise of tax services in Philadelphia, Pennsylvania, you can avoid these risks and have peace of mind that your taxes are done right the first time.