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irsfixer
Joined: 24 Jul 2007
Posts: 170
Location: Houston
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| Posted: Wed Aug 13, 2008 8:34 am Post subject: |
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summersoltys wrote: I actually just ran a report and it is closer to $5,000
If they have 10 or more employess receiving this commission, I would do nothing about the past. If it is less, I would add it to their next check and tax it, then show the payments received as an advance. If it is too much for one check, spread it out over several checks. |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Wed Aug 13, 2008 8:36 am Post subject: |
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| So basically if one employee didnt receive more than $600 in this commission it should be fine if we correct future commissions? |
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irsfixer
Joined: 24 Jul 2007
Posts: 170
Location: Houston
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| Posted: Wed Aug 13, 2008 9:00 am Post subject: |
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summersoltys wrote: So basically if one employee didnt receive more than $600 in this commission it should be fine if we correct future commissions?
It is not right per se but that is how I would handle it. |
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summersoltys
Joined: 12 Aug 2008
Posts: 12
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| Posted: Wed Aug 13, 2008 10:32 am Post subject: |
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| Thanks so much for all of your help... |
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Ahshucks
Joined: 22 May 2008
Posts: 50
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| Posted: Tue Aug 26, 2008 11:11 am Post subject: |
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This doesn't appear to be a commission especially in this type of business. This is tip income and has been a sore spot with the IRS for the past number of years. It's priority on their agenda, and could easily trigger IRS audits. I don't know your situation but you may review it as it relates to you here:
http://www.irs.gov/businesses/small/article/0,,id=155253,00.html
Pub 531: http://www.irs.gov/pub/irs-pdf/p531.pdf |
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stasia2003
Joined: 25 Feb 2008
Posts: 199
Location: FL
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| Posted: Tue Aug 26, 2008 1:41 pm Post subject: |
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Ahshucks wrote: This doesn't appear to be a commission especially in this type of business. This is tip income and has been a sore spot with the IRS for the past number of years. It's priority on their agenda, and could easily trigger IRS audits. I don't know your situation but you may review it as it relates to you here:
http://www.irs.gov/businesses/small/article/0,,id=155253,00.html
Pub 531: http://www.irs.gov/pub/irs-pdf/p531.pdf
Hi ahshucks. Please reread the original poster's initial post. He said that for every bottle of wine the servers sell, they get $20. Notice this did not say that the customers give them $20. It seems that the restaurant is passing on the $20 as a commission for a sale. A tip is typically considered money given to a server directly from a customer.
This pretty much falls under commission. I did read the links you provided and they do not apply here as tip income. But it still should be reported on the server's check as wages. |
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