Tips and Service charges treatment

Smart managers will always treat tips and services charges in their industry as regular wages for withholding. They not only comply with the internal revenue code section 3111 and 3121 (a), revenue ruling 59-252 but meets FICA tax purposes and the regulation section 3102 (a) code 31.3102-3 and 31.3402 (k) – 1 (c). The good manager understands their social responsibilities to pay both the FICA share of withholding on form 941 quarterly tax returns on time. Following these practices, restaurant owners set themselves above their average counterparts because they treat tips and service charges as regular wages for withholding for filing requirements in publication 15.

Sales tax treatments

Smart restaurant managers would not classify sales tax as revenue or expense. Instead, some accountant/bookkeepers categorize them as income. Others used them for payroll expenses, but unfortunately, it is a liability. In New York State, tax collected in January falls due on February 20^th for the monthly filers. For sellers tasked for quarterly filing frequency, first quarters start from March–May, and due on June 20^th. Those tasked for annual frequency – filing deadline is March 20^th, 2020, for 2019. But filing deadlines vary from state to state. The best practice in the restaurant industry is for those wise owners who set up separate saving accounts solely for sales tax collection because they understood it is not revenue. It should be kept safe for future payments. Also, managing tips and sales tax payable understanding your liabilities and when they are due can help you run your restaurant successfully.

Cost control treatment

Successful restaurant operators understand how to handle cost controls, payroll expenses within their prime cost, and the need to draw an adequate cost plan to achieve their objectives. Workers weekly wage payment is critical to every growing organization, and if they do not get paid, the owner just not lose his employees but face the department of labor sanctions and query. Sharp Bar and Restaurant leaders who understand the benefits and the treatment of income tax, estimated tax, self-employment tax, employment tax, excise tax, tips, and services charges in their industry, are ready to fire up.

Title 31 Code of Federal Regulation (CFR) 10.36 – Compliance

It is the restaurant owner / accountant or bookkeeper’s responsibility to ensure that proper firm procedures are put in place to comply with the federal, state, and or local laws. Managers or accountants who due to recklessness or willfulness and or gross incompetence failed to comply destroy their own business. You can grow your business by successfully implementing the above laws.

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