Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I am a tipped employee in a small local houston texas restaurant.

Customer Question
My employer deducts credit card...
I am a tipped employee in a small local houston texas restaurant. My employer deducts credit card processing fees for our tips. The amount deducted is not consistent and is never itemized on my pay stub. I am just paid "net" tips with no accounting for the deductions. I know that deductions of this type are legal so long as the deduction does not exceed the employers actual cost of processing the tip. But legally shouldn't my pay stub be itemized so I know the cost being deducted from my tips?
Submitted: 1 year ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 11 minutes by:
4/13/2016
Tax Professional: Lev, Tax Advisor replied 1 year ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,154
Experience: Taxes, Immigration, Labor Relations
Verified
From legal prospective - if income was not received - it may not be reported as paid on the pay stub.That is not withholding from your payment - but tip income received by your employer (via credit card) and never transferred to you.See herehttp://www.twc.state.tx.us/news/efte/delivery_of_wages.htmlAlthough pay receipts or check stubs, otherwise known as "written statements of earnings", are not required for employees covered by the federal law known as the Fair Labor Standards Act (see sections 62.003 and 62.151 of the Texas Minimum Wage Act - the latter section exempts FLSA-covered employees from the Texas minimum wage laws, including the earning statement provision), it is nonetheless a very good idea to give employees such receipts or check stubs. For one thing, a receipt or check stub can help serve as one of the kinds of wage and hour records required under the FLSA's recordkeeping requirements. For another, giving employees proof of how their wages were computed, including deductions from wages, can help minimize complaints and suspicions on the part of employees about whether their wages were properly paid. The statement of earnings may be in either written or electronic form. If sent via e-mail, consider using some form of password ***** and/or encryption, since privacy and identity theft issues are becoming more critical all the time. If sent via regular mail, keep the recent law in mind that requires employers to give employees an annual reminder that they have the right to request the company not to print their Social Security number on any document sent through the mail (section 501.001(b) of the Texas Business & Commerce Code). Concerning cash wages, an employer should simply never, ever give wages in cash without at least getting a signed receipt from the employee showing that a certain amount of wages was paid in cash on a certain date. Failing to keep such documentation can expose an employer to a claim that wages were not paid at all..Another important aspect - is reporting income for tax purposes.Income is included into gross income for income tax purposes if Constructively received.Income is constructively received when an amount is credited to your account or made available to you without restriction. In your situation only a part of tip amount after credit card fees are deducted is constructively received - and ONLY that amount should be reported on W2 form and to the IRS.Questions?
Ask Your Own Tax Question
Customer reply replied 1 year ago
If I am not being told what my gross tips are, how am I to know if my w 2 is reflective of my gross or net tips?
Tax Professional: Lev, Tax Advisor replied 1 year ago
For tips paid directly to you - Employees must report tip income on Form 4070, Employee's Report of Tips to EmployerSo you know what you received and what you reported to your employer.
Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 1 year ago
For tips paid directly to your employer - your employer keep track of amounts paid to you.So you should know what you are receiving.And that is recorded in Employee’s Daily Record of Tips - see page 3https://www.irs.gov/pub/irs-pdf/p1244.pdfThere is a separate column for Credit and debit card tips received by your employer on your behalf..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.
Ask Your Own Tax Question
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,154
30,154 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I owe the IRS $2340, for late reporting on form 1065, can I
I owe the IRS $2340, for late reporting on form 1065, can I just send them a partial payment and ask for installments if possible. thanks: Luis v Olivares Lodi, Ca … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,220 satisfied customers
Form 886-A Deductible Home Mortgage Interest Taxpayer has
Form 886-A Deductible Home Mortgage Interest Taxpayer has $1,000,000 in Grandfathered debt. Line 9 Form 886-A - is this line amount after deducting the garandfathered debt… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Are you familiar with income tax laws on business and
Are you familiar with income tax laws on business and personal returns? … read more
Lev
Lev
Tax Advisor
30,154 satisfied customers
Dose mean can not deduct state income taxes only or dose it
dose mean can not deduct state income taxes only or dose it includes property taxes too … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I need a form to apply to have 10% of my SS check deducted.
I need a form to apply to have 10% of my SS check deducted … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
Form 1120, cash basis. If Taxes paid to IRS are deductible,
Form 1120, cash basis. If Taxes paid to IRS are deductible, are refunds for overpayment the equivalent of income?… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
736 satisfied customers
Two questions on federal tax deductibility: 1. We personally
Two questions on federal tax deductibility: 1. We personally paid legal fees for our manufacturer C Corp. The fees were for assistance in preparing a Research & Development tax credit application. Can… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
You may recall that tax deductions are only deductible by
You may recall that tax deductions are only deductible by the legislative grace of Congress. After this lesson, you might have realized that Congress was pretty generous with the types of business exp… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES ALIMONY PAYMENTS, WHAT CAN QUALIFY AS TO ***** REDUCE THE TAX ON THE ALIMONY RECEIVED ? CAN BUSINESS LOSES BE CARRIED OVER TO REDUCE THE TAX ON … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Federal Tax Credit or NC Tax Credit For 2017, is there any
Federal Tax Credit or NC Tax CreditFor 2017, is there any type of tax credit for replacing a roof on a historical house (1870)? It is primary residence. They will either replace the roof or do "hydros… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
What tax form is filed to report dividends paid by US Corp?
What tax form is filed to report dividends paid by a US Corp which is owned by a Canadian Corp? I think it might be 1042S. I want to know the rate of WH.… read more
abci168
abci168
Principal
27 satisfied customers
What would the federal and state tax rate percentages be for
What would the federal and state tax rate percentages be for a $7700 IRA early withdrawal in Ohio?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
Can house maintenance and property taxes be deducted on form
Hello. Can house maintenance and property taxes be deducted on form 1041 for a house owned by decedent prior to the Executors selling it? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Second opinion] Yes, I filled out the IRS withholding
Second opinion] Yes, I filled out the IRS withholding calculator and it suggested I claim 8 allowances. That seems excessive. I redid it today and IRS says to claim 6, and a similar calculator from Tu… read more
Lev
Lev
Tax Advisor
30,154 satisfied customers
I filled out the IRS withholding calculator and it suggested
I filled out the IRS withholding calculator and it suggested I claim 8 allowances. I am single, live independently, and have no dependents. I worked at a different, lower paying job from January to mi… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
I would like clarification on the IRS tax deductions and a
I would like clarification on the IRS tax deductions and a rental property I purchased recently. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Where do I deduct retirement income from gross income in PA,
Where do I deduct retirement income from gross income in PA … read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
682 satisfied customers
Can lost profit be used as a deduction for federal income
Can lost profit be used as a deduction for federal income tax? … read more
Rick Martin
Rick Martin
MBA
92 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x