In a recent interview on Inside South Florida, Tricia Golomb, owner of Payroll Vault, shed light on the growing trend of service charges and mandatory tips in restaurants, as well as the importance of understanding tipping regulations, especially as tax season approaches.
Golomb acknowledged that tipping fatigue has become increasingly common among Americans, particularly since the pandemic. Many patrons feel that suggested tip amounts are too high and prefer to base their tips on the quality of service received. However, she emphasized the significance of tipping for workers who rely on this income to make ends meet.
For tipped employees, it's crucial to report earnings exceeding $20 per month in tips to their employer, as required by the IRS and the Department of Labor. Golomb stressed the importance of keeping accurate records and timely reporting to ensure compliance with tax regulations.
To ensure fair distribution of tips, Golomb advised employers to implement transparent and timely tip-sharing practices among employees. This includes properly documenting tip distributions and ensuring that all tips are paid out to employees promptly, without any portion being withheld by the employer.
Golomb highlighted the importance of maintaining compliance with IRS and Department of Labor regulations, noting that adherence to reporting requirements is essential to avoid potential audits and penalties. She encouraged both employees and employers to prioritize accuracy and integrity in their tipping practices.
For those seeking guidance on tipping regulations and tax compliance, Payroll Vault offers assistance and support. For more information, interested parties can contact Payroll Vault by calling (954) 889-8002 or visiting their website at PayrollVault.com/138.
