Restaurants »
The restaurant industry accounts for more than $600 billion in sales and employs over 12 million taxpayers. Often the first job for many of America’s youth, and accounting for more than 27% of the industry’s employees, the restaurant and food service industry employed nearly one half of all adults at one time or another.
Businesses within the industry are diverse from small family owned restaurants to large franchised establishments with a range of tax issues across accounting methods, credits, and deductions. In addition, the restaurant industry is often associated with a unique payment system for tips. This focus center provides news and information regarding the tax issues specific to the restaurant industry.
Tip Wages Subject to Employment Taxes Receive Clarification by IRS
The Internal Revenue Service issued Revenue Ruling 2012-18 answering a number of questions regarding tip income and employment taxes. Employers must pay Federal Insurance Contributions Act (FICA) taxes that includes social security and Medicare
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McDonald’s Franchise Owners Allowed Deduction to Correct Abusive Tax Scheme
The U.S. Tax Court recently held that twelve McDonald’s franchise owners were not attempting to avoid taxes by purchasing shares in an S Corporation and were allowed a deduction for $2,969,000. In the late
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Treatment of Upfront Payments to Restaurant Owners from Suppliers
Top Takeaways 1: Vendor allowances paid after or with a purchase are treated as reduction of the purchase price Restaurant owners and suppliers frequently make these special arrangements that typically extend beyond a single
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Smallwares Accounting Method for Restaurant Supplies
Top Takeaways 1: Can Deduct Restaurant Supplies Smallwares in the Year Purchased If you are a restaurant or tavern owner, you may want to consider taking advantage of a new IRS procedure which allows
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Tip Income
Top 3 Takeaways 1: Tips are Subject to Income Tax Tips are generally considered as wages and subject to tax. Employers are required to withhold federal income taxes, pay Social Security taxes and pay
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