Hello - I'm an EA, not a CPA, and a client is debating with me.....
Are tips (that qualify as spur of-the-moment NOT added to bill) included in the gross receipts on the P&L and thus on the tax return?
These are tips collected through the credit card merchant.
The client owns a restaurant.
I thought that they were not to be included as gross receipts and that they are thus not an expense either when given to the employee (the payroll TIPS are treated as some sort of credit/debit that makes it a balance sheet item, but not a P&L item).