Gold Rush Policy and Procedure
Since GR (Gold Rush Dog Tours, LLC have employees who participate in the Service Industry compliance with tip reporting to the IRS is required.
As stated in the employee handbook and accepted and acknowledged by you:
AIE & GR strictly prohibit the solicitation of TIPs.
Solicitation of tips, donations or any other “creative” method of obtaining a tip is not acceptable. You may provide a guest with a kennel business card and encourage them to follow you on your web site/Facebook page.
It is very likely that you will receive tips…
Tips are discretionary (optional or extra) payments determined by a customer that employees receive from the customer(s).
Tips include:
• Cash tips received directly from customers.
• Tips from customers who leave a tip through electronic settlement or payment. This includes a credit card, debit card, gift card, or any other electronic payment method.
• The value of any noncash tips, such as tickets, or other items of value.
• Tip amounts received from other employees paid out through tip pools or tip splitting, or other formal or informal tip sharing arrangement.
All cash and non-cash tips an employee receives are income and are subject to Federal income taxes. All cash tips received by an employee in any calendar month are subject to social security and Medicare taxes and must be reported to the employer, unless the tips received by the employee during a single calendar month while working for the employer total less than $20. Cash tips include tips received from customers, charged tips (e.g., credit and debit card charges) distributed to the employee by his or her employer, and tips received from other employees under any tip-sharing arrangement
Employee Responsibilities:
As an employee who receives tips, you must do three things:
1. Keep a daily tip record.
2. Report tips to the employer, unless less than $20.
3. Report all tips on an individual income tax return.
Employer Responsibilities:
The employer has multiple obligations with regard to employee tip income, including recordkeeping and reporting responsibilities, collecting taxes on tips, filing certain forms, and paying or depositing taxes.
• Employers are required to retain employee tip reports.
• Withhold employee income taxes and the employee share of social security and Medicare taxes based upon wages and tip income received,
• Pay the employer share of social security and Medicare taxes based on the total wages paid to tipped employees as well as the reported tip income.
Tips reported to the employer by the employee must be included in Box 1 (Wages, tips, other compensation), Box 5 (Medicare wages and tips), and Box 7 (Social security tips) of the employee’s Form W-2, Wage and Tax Statement. Enter the amount of any uncollected social security tax and Medicare tax in Box 12 of Form W-2. For more information, see the General Instructions for Forms W-2 and W-3.
Employers must report income tax and social security and Medicare taxes withheld from their employees’ wages and the employer share of social security and Medicare taxes on Form 941, Employer’s QUARTERLY Federal Tax Return, and deposit these taxes pursuant to federal tax deposit requirements.
Most employers are also responsible for filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, and depositing those taxes. Only the employer pays FUTA tax; it is not withheld from the employee’s wages
You will be provided with IRS forms for tracking tips received and shared on a daily basis.
You will need to complete and submit IRS form 4070A as notice to the employer of tips received. This information will be included on your paycheck.
Your paycheck cannot be issued without the required monthly IRS forms.
Gold Rush Crew 