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My mission is to guide restaurants, hospitality, and qualifying beauty businesses through the FICA Tips Tax Credit process with clarity and integrity—helping them claim what they’re owed and build cleaner payroll and reporting systems going forward.
If you have tipped W-2 employees and you’re not filing Form 8846, there’s a strong chance you’re leaving real money behind. We help you recover the current year and, when eligible, go back up to three years through amended returns.
Restaurants and hospitality businesses have been eligible for decades — but most never claim it because payroll providers don’t apply it automatically and many preparers don’t chase it.
We handle the full credit calculation using the rules that apply to food/beverage tipped employees, including the “non-creditable tips” minimum wage basis used in the calculation (Form 8846 instructions reference $5.15/hour for food or beverage employees).
As part of the 2025 Budget Reconciliation Bill (aka the One Big Beautiful Bill / One Big Beautiful Bill Act), signed into law July 4, 2025, the FICA tip credit was expanded to include beauty service establishments.
The bill language extends §45B to “beauty services” and applies to tax years beginning after Dec. 31, 2024 (meaning it’s claimed with 2025 returns).
Beauty services (as defined in the bill / IRS form instructions) include:
Important beauty-industry qualifier:
To claim the credit for beauty services, the law adds a threshold: tips for those services must exceed 15% of gross receipts for those services in the year.
Beauty minimum wage basis for the credit: Form 8846 instructions reference $7.25/hour for beauty service employees.
If tipping is customary and you employ W-2 staff, many of these often fall into the “beauty services” bucket (or contain qualifying services inside the business):
Note: Tipping is generally not expected/allowed for medical professionals performing medical procedures (Botox/fillers), but non-medical services in the same facility may still involve tips and may qualify depending on service type.
Because this credit is easy to miss, easy to miscalculate, and expensive to ignore. We confirm you qualify, calculate it correctly, file it clean, and support you if the IRS ever asks questions.
1) Quiet Second Opinion (Eligibility + Real Savings)
We confirm you qualify under IRS §45B, identify which employees/services count, and estimate what you may be missing.
2) Tip + Payroll Verification (Built to Hold Up)
We verify tips are captured through payroll and reflected properly in your reporting, since the credit is based on reported tips and employer-paid FICA.
3) Tip vs Service Charge Separation (Big Deal)
We separate true tips from service charges/auto-gratuities, because mandatory charges generally don’t qualify as tips for the credit.
4) Minimum Wage Threshold Math (Where People Mess Up)
We apply the correct minimum-wage basis rules so the credit only includes eligible tips above the threshold.
5) Form 8846-Ready Credit Package
We prepare the calculations and documentation needed to claim the credit correctly using Form 8846.
6) Prior-Year Recovery (When Eligible)
We help pursue missed credits for prior years through amended filings, so you stop losing money to the calendar.
For tips to count, they must be:
01 — Simple Application
Quick form with basic business info.
Transparent Pricing: no upfront cost to check eligibility; fees explained before you sign.
02 — We Do the Heavy Lifting
We calculate savings, prepare documents, and handle filing requirements.
03 — Tracking + Audit Defense Included
We keep you updated and respond with documentation support if the IRS asks questions.
04 — Get Paid
It’s an income tax credit that lets eligible employers recover the employer-paid FICA (Social Security + Medicare) on employee-reported tips. The rate tied to that employer FICA portion is 7.65%.
Businesses with W-2 employees in industries where tipping is customary—traditionally food & beverage / hospitality, and now (new) beauty & personal care under the OBBB changes.
Beauty & personal care businesses became new qualifying businesses after 12/31/24, and the credit is claimed with 2025 returns, due to the 2025 Budget Reconciliation Bill (OBBB) signed into law July 4, 2025.
What beauty businesses are typically tipped and may qualify?
Common examples include:
For eligibility and credit math, the “minimum wage basis” differs by industry:
No. The FICA Tip Credit does not refund payroll taxes you already paid. It offsets income tax owed by the business (C-Corp) or flows through to owners (S-Corp/Partnership). Refund outcomes depend on your tax liability and credit utilization rules.
Often the current year plus up to the last three years (depending on filing timing and amendment rules). After enough time passes, that year is gone—no rewinds.
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“Danna was the first person who explained this credit in plain English and then actually did the work. Eligibility, tip rules, documentation—handled. We stopped guessing and started filing correctly.”
Anthony R., Restaurant Owner — Los Angeles, CA
“We assumed payroll or our CPA would automatically catch this. Nope. Danna found what we missed, showed us why, and packaged it in a way that felt clean and defensible.”
Melissa K., Controller — San Diego, CA
“Her process is tight: tip vs service charge separation, minimum wage threshold math, and making sure everything aligns with payroll reporting. No fluff—just results.”
Derek L., Bar & Lounge Operator — San Jose, CA
“Danna doesn’t ‘kind of’ understand the FICA tip credit—she knows it cold. She caught mistakes we didn’t even realize mattered and helped us fix them going forward.”
Priya S., Hospitality Owner — San Francisco, CA
“We’re in California and the wage/tip rules can get complicated fast. Danna knew exactly how to navigate it and make sure we only claimed what truly qualified.”
Jonathan M., Multi-Location Operator — Sacramento, CA
“We’re a salon with W-2 staff and didn’t realize we could even be in the conversation. Danna walked us through the requirements, confirmed what counted, and made the process simple.”
Sofia G., Salon Owner — Irvine, CA
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