By Jeff Rudner, CFO
April showers bring May flowers, and a flurry of people filing their taxes.
In industries where tips make up a large part of an employee’s income, (we’re talking to you Salon & Spa professionals), filing taxes can be confusing with a burden being placed on both the employees and company owners.
According to the IRS, employees must keep a daily tip record, report tips to their employer, and report all tips on their income tax return. As an employer, there’s even more work to be done including reporting tips collected by employees, collecting taxes on tips, filing forms, and paying or depositing taxes. Employers also have the responsibility of paying their share of Social Security and Medicare taxes on the tip income earned by their service professionals.
In order to be compliant with the IRS, employers and employees must report tips received in all forms, including cash tips. The Tippy mobile app allows service professionals to input cash tips to track alongside their Tippy tips. Additionally, the mobile app allows service professionals to click a button to email their complete tip history to themselves- an easy way to share with their accountant. No more stuffing tip journals in shoeboxes or keeping track of tips by hand. Instead, just pull up the Tippy app on your phone and with a couple taps you are on your way. Lastly, the Tippy dashboard provides a one-stop shop for all of the company owner’s reporting needs. We provide all of the necessary data in an easy to use and exportable format.
If all of this sounds like a lot to handle, you’re right. But we designed Tippy to alleviate a lot of the stress of being compliant so when tax season rolls around reporting is a breeze.