Which of the following statements correctly describes the withholding of federal income taxes and social security taxes on tips?

Question

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When employees report taxable tips in connection with employment in which they also receive regular wages, the amount of tax to be withheld on the tips is computed as if the tips were a supplemental wage payment. This means that the employer must withhold federal income tax as well as the employee's share of social security and Medicare taxes on the reported tips. The amount of the employer's share of social security and Medicare taxes on the tips is based on the employer's portion of the FICA tax rate. Tips amounting to $10 or more in a calendar month must be reported by tipped employees to their employers, but this is not directly related to the withholding of taxes on the tips.

Which of the Following Statements Correctly Describes the Withholding of Federal