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In today’s world, employees who receive tips must report those tips to their employer on a monthly basis (if greater than $20 in the month). Employers are responsible for withholding FICA taxes and federal state income taxes, and paying the matching employer portion of the FICA taxes on tip income. This manual process is largely unenforceable and clunky, at best.
The Grazzy platform tracks tips by employee and provides IRS tip income-compliant reporting that is available daily, weekly, bi-monthly, or monthly. We ensure you and your team have accurate, digital records to keep you on-track and protected. With Grazzy you can expect automated, accurate, and digital record keeping. Grazzy provides IRS-compliant 4060 tip report by employee every two weeks, in alignment with your payroll schedule.
Many employees are accustomed to accepting tips via cash apps like Venmo and Paypal. However, the IRS recently announced that 2022 will serve as a transition year to a reduced reporting threshold of $600 – meaning that if your employees have received $600 on any cash app, like Venmo, they will receive a Form 1099-K from that cash app. For comparison, the previous threshold was $20,000.
This massive threshold decrease will without a doubt hit many of your employees with sticker shock at the end of the year. With Grazzy, taxes and compliance are handled in real time and a detailed, digital record of tips is maintained for you.
Compliance and accurate reporting are not just a “nice to have,” they are a necessity. Grazzy ensures that you and your team are covered with IRS-compliant reporting delivered to you and your payroll department at your requested intervals.
Partner with Grazzy for taxes and compliance made easy.