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When is tip income allocated in food and beverage establishments?

April 26, 2017allocated beverage establishments food income tip

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When is tip income allocated in food and beverage establishments?

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Tip allocation is only required when the amount of tips reported by employees of a large food or beverage establishment is less than 8% (or an approved lower rate) of the gross receipts (other than nonallocatable receipts) for the given period. For additional information on tip allocation, visit the IRS website at www.irs.gov.