Flo is a server at a diner in Phoenix and earns a significant portion of...

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Accounting

Flo is a server at a diner in Phoenix and earns a significant portion of her pay through tips from customers. Some of these tips are paid via credit card and others are paid in cash. Flo's employer will:

a. Withhold employment taxes but no income taxes on the tips

b. Withhold both employment and income taxes on the cash tips but only employment taxes on the tips paid by credit card

c. Withhold both employment and income taxes on all tips

d. Not withhold any taxes on cash tips but will withhold both employment and income taxes on credit card tips

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