The Difference Between the Tipped Employee Minimum Wage and the Federal

question 53

Multiple Choice

The difference between the tipped employee minimum wage and the federal minimum wage is called the ________.

• A)Tip allowance
• B)Wage credit
• C)Tip credit
• D)Wage allowance

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Definitions:

Surtax

An additional tax levied on top of the base tax rate for specific purposes or income brackets.

MAGI

Modified Adjusted Gross Income is a measure used by the IRS to determine eligibility for certain tax benefits, adjusting the gross income by adding back certain deductions.

Short-term Gain

Profit realized from the sale of assets held for a year or less, subject to taxes at ordinary income rates in many jurisdictions.

Long-term Gain

The profit from the sale of an asset held for more than a year, subject to lower capital gains tax rates.