Welcome to the Community, cvcoffeeco. I'm here to share some knowledge and assist you in tracking those tips in QuickBooks Online.
You must keep track of and deduct taxes from any tips that your employees received from clients. Also, If the tip is less than $20 per month, tips aren’t subject to federal taxes.
Tips received through credit card and debit card charges can be added to your employees' paychecks alongside their regular pay to ensure that taxes are also properly tracked.
To do this, you'll need to set up a payroll item for tips in QuickBooks.
Here's how:
- Go to Payroll, then Employees.
- Choose your employee.
- Click on Edit from Personal Info.
- In Additional pay types, select Cash Tips or Paycheck Tips.
- Once done, hit Save.
I'm adding this article for more information: Pay and report tips.
You can also visit this link and use it as a reference in the future: Year-end checklist for QuickBooks Online Payroll.
For other concerns about tips and payroll taxes, let me know by leaving a comment below. We're always willing to assist. Have a wonderful day!
