As a Las Vegan, prior to joining the service I worked in the service industry in the casinos as a server

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As a Las Vegan, prior to joining the service I worked in the service industry in the casinos as a server, busboy,
and room service attendant earning the majority of my pay through cash tips. While the majority of the larger
casinos have an electronic system in place to easily track and tally their employees’ cash tips and tip compliance
guidelines, the casino I worked at did not. The process of manually figuring out the correct percentages to claim
and tip out and then distribute to support staff while staying in compliance with IRS guidelines and service
industry standards was always a hassle to go through at the end of a long shift. The casino I worked at could
really benefit from implementing a system to make this process easier and more efficient, support industry
standards, and ensure adherence to IRS rules.
According to current IRS guidelines, tips of any form (cash, via credit card, or gift) given by a customer/another
employee valued at over $20 must be claimed and reported to your employer and reported by the tenth of every
month (Internal Revenue Service, 2020). Las Vegas service industry standard is to take 20% of your total tip
take for the day/shift to be distributed to your support staff which can include a busboy, bartender, hostess,
and/or food expediters and runners. The new system must do the following:

  1. The system must link with the casino’s respective payroll and Point of Sale systems to ensure proper income
    recording for tax purposes and efficiently track/total gratuity amounts from sales paid via credit card.
  2. The system must notify the user when they have reached the minimum reportable tip amount as mandated by
    the IRS.
  3. The system must add the total tip amount from credit card tabs to the user-entered cash tip amount which will
    result in the total tip amount for the entire shift.
  4. The system will calculate 20% of the total tip amount for the user to distribute to support staff.
  5. The system will give the user the option to tip the support staff electronically (vice cash) by choosing their
    respective names or employee ID number from a drop-down menu.
    Sources: Internal Revenue Service. (2020, July 31). Tip recordkeeping & recording.
    https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
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