Form 8027 is used to report tipped income received by large food and beverage establishments as well as their tipped employees. This form is an essential record keeping document for restaurants to avoid disputes with the IRS about their tipped income. But it can also be a bigger waste of time than it needs to be for restaurant owners who extensively research or even file the form with the IRS when they don’t need to. With this in mind, here’s a quick and easy guide to determine if your food and beverage business is required to file. And if you do need to file form 8027, be sure to check out the software support from Advanced Micro Solutions (AMS).
What is Form 8027? What is a Food or Beverage Establishment?
The people most likely to ask “What is Form 8027?” are new and small restaurant owners who have learned that this IRS form is used for reporting tips. Most, then, want to know if their restaurant business is required to submit this filing form. We encourage businesses to do their due diligence and understand the intricacies of this form as it applies to their business and bring in the support of a restaurant payroll software. The IRS publishes comprehensive Instructions for Form 8027. That said, there are a few common and easily identifiable exceptions that can help some businesses avoid reading through the entire rules and regulations one-by-one:
- Your food and beverage business only needs to file Form 8027 if it operates in a way that makes tipping customary. Put more simply, if you own a fast food restaurant, if you use cafeteria-style service, or if a restaurant in which the service charge is 10% or more of the sales, then you won’t have to file this form.
- Multiple locations are treated as separate food and beverage operations. So if you own 3 restaurant locations and none of them reach this ten-employee threshold, you should be okay. This exemption applies even to multiple locations within the same building. Form 8027-T
- As a way of helping out smaller food and beverage businesses, you also won’t have to file if you employed 10 or fewer employees during a typical business day. It’s this ten-employee test that tricks up a lot of food and beverage owners. Who, what, and when counts toward one of these ten employees? If the average staff at your restaurant is even close to this mark, we strongly recommend you fill out the Worksheet for Determining if You Must File Form 8027. (You can find this worksheet in the form instructions link listed above.)
Get Software Support for Form 8027
What is Form 8027 software? AMS offers an intuitive platform with an appealing set of core features for preparing W-2 and 1099 forms. Add to this platform, our Forms Filer Plus module to get the support you need for 8027 and 8027-T filings. That’s the beauty of our system. With versatile data management features, you can quickly and reliably take care of your form filing requirements. But better yet, a sophisticated module interaction allows our customers to pick and choose which support features make sense for their business. Check out our entire catalogue of products when buying your accounting software and you can get a comprehensive solution that will enable you to take care of your payroll and form filing without leaving the office:
- 1099 & W2 Software
- Forms Filer Plus
- Software-Generated Forms
- E-File Direct
- Affordable Care Act Filer
- 1042-S Filer