Beauty and Wellness Business Books Cleanup Form 8846 is a food-service credit
Someone reached for a tip credit because the week was full of chair tips. A large tip total does not turn a salon week into a dining room.
Ask about the creditRead the instructions before the form
Form 8846 is the Employer Credit for Social Security and Medicare Tax Paid on Certain Employee Tips. The credit exists so an employer in a tipped food or beverage business can recover the employer share of those taxes on tips above the federal minimum that applies. The instructions limit who may claim it. Customers must be tipping employees who provide, deliver, or serve food or beverages for consumption, and that tipping must be customary.
A haircut, a facial, a massage, and a manicure are not that work. Putting those tips on Form 8846 because the form mentions tips is how a credit gets claimed for a business the instructions did not describe. We will not prepare the form on that basis. If you ask, we will show you the sentence in the instructions and stop.
When the same owner also serves food
Some businesses have a counter that actually serves food or drinks for consumption, with employees who are tipped for that service. That slice can raise a real question under the instructions. The chair tips still do not join it. Mixing the two tip pools so the food credit covers the salon is the move this page is here to refuse.
Employee tips in the salon still follow the tenth and the wage record. The credit and the report are different jobs. One can be required when the other is not available.
Name the question
You will be talking to the Steven Palmieri practice.