Accounting for Hospitality

Tipped employees pay income and payroll tax on their tips, and as the employer you also pay the employer share of Social Security and Medicare (FICA) tax on most of those tips.

The Section 45B FICA tip credit lets qualifying food and beverage employers claim a federal income tax credit for the employer FICA tax paid on tips above the amount treated as wages for the federal minimum wage, claimed on Form 8846.

Because it is part of the general business credit, many operators overlook it or fail to document it correctly. We calculate the credit from your payroll and tip records, reconcile it to your returns, and keep the support your file needs.

Yes. Large food or beverage establishments must report employee tip income and, where reported tips fall short, allocated tips to the IRS each year on Form 8027.

We reconcile charged tips, cash tips, and gross receipts, calculate any required tip allocation, and coordinate employee reporting including Form 4137 for unreported tips.

We also help you stay compliant with tipped-wage rules and tip-pooling arrangements so that payroll, your POS system, and your tax filings all tell the same story.

Absolutely. Prime cost, the combined cost of food, beverage, and labor, is the clearest indicator of whether a busy dining room is actually profitable.

We build reporting around cost of goods sold and inventory so you can see food and beverage cost as a percentage of sales, spot waste and comps, and catch shrinkage before it compounds.

On the labor side, we track wages, overtime, and scheduling against sales so you can protect margin without cutting the service that fills seats, benchmarking trends over time rather than guessing from a single period.

Yes. WhippleWood has partnered with franchisees since the early 1990s and understands the financial reporting requirements franchisors impose on their operators.

We provide business tax consulting to franchisees buying and selling restaurants, structuring transactions to position them to maximize value and minimize tax problems.

We understand the value drivers in this business and the tax ramifications of buy/sell transactions, from purchase-price allocation and depreciation to entity structure and succession planning.

Restaurants and hotels are capital-intensive. Kitchen equipment, furniture, fixtures, technology, and tenant build-outs all represent real money that should work for you at tax time.

We apply Section 179 expensing and bonus depreciation to qualifying furniture, fixtures, and equipment so you can accelerate deductions in the year assets are placed in service.

For owned or substantially renovated buildings, a cost segregation study reclassifies components into shorter depreciable lives, pulling deductions and cash flow forward. We model the options and coordinate the study so the benefit is documented and defensible.