June 17, 201412 yr If the company is doing it legit the tips are taxed either way. I was told that claiming my tips were between me, God, and the IRS.
June 17, 201412 yr So if it's included on the bill then the waiter or waitress is having that taxed whereas tips are straight cash with no taxes taken. I was told that claiming my tips were between me, God, and the IRS. Tips do get reported (at least by legit restaurants). My daughter has been a server at Skyline for several years and tips get reported and the taxes are taken out of the checks from the (very low) hourly pay the wait staff receives. I'm sure there are a few restaurants out there that don't bother, but it's playing with fire, since if they don't, the extremely low payroll taxes they'd be paying would raise quite a few red flags both on their and their employees tax returns.
June 17, 201412 yr I took a colleague and a client here last Thursday for lunch. Food was incredible and reasonable. I will definitely go back.
June 17, 201412 yr I was told that claiming my tips were between me, God, and the IRS. Then your employer was operating illegally.
June 17, 201412 yr Tips do get reported (at least by legit restaurants). My daughter has been a server at Skyline for several years and tips get reported and the taxes are taken out of the checks from the (very low) hourly pay the wait staff receives. I'm sure there are a few restaurants out there that don't bother, but it's playing with fire, since if they don't, the extremely low payroll taxes they'd be paying would raise quite a few red flags both on their and their employees tax returns. Exactly. The IRS has put the burden on the employer to report. Those that don't are taking a huge risk which is why you see so many going under due to unpaid payroll taxes.
June 17, 201412 yr Aren't they supposed to have you fill out some form with the amount you make in tips, then withhold a % of that amount from your paycheck to account for it?
June 17, 201412 yr Aren't they supposed to have you fill out some form with the amount you make in tips, then withhold a % of that amount from your paycheck to account for it? Most now do a calculation based on sales, then allocate to the servers in some manner. Having the server self report led to too many "mistakes".
June 17, 201412 yr It is my understanding that most establishments (I can think of several that I know for a fact do it this way and are well known establishments) will automatically tax your tips if they are received via credit card or debit card. However, if you are getting cash tips, how could the establishment possibly be responsible for money that never makes it to them?
June 17, 201412 yr It is my understanding that most establishments (I can think of several that I know for a fact do it this way and are well known establishments) will automatically tax your tips if they are received via credit card or debit card. However, if you are getting cash tips, how could the establishment possibly be responsible for money that never makes it to them? There are various reporting requirements placed on the employer based on the number of tipped employees it has. The returns highlight "inconsistencies" (lies to the common person). You can bet if an employee claims 8% cash tips and has averaged 18% on credit cards the IRS computers will notice. Usually the employer will handle it internally with the employee ahead of any IRS inquiry. The smart employers realize where the IRS is going to go for penalties and interest. The real life situation is if the restaurant as a whole isn't worth the IRS resources to investigate, it will get away with under reporting tips unless someone wants to make an example out of a business to keep others in line.
June 17, 201412 yr I've never worked as a server or bartender, so I just know what the girlfriend has told me about her previous positions at different establishments (Brothers & Yardhouse). In regards to my position, I get paid minimum wage or commission, whichever is higher, which is always commission. The employer has no idea how much I make in tips because it is all cash that never leaves my hands to go to theirs. 2013 was the first time I had this position, but I did fully report my tips to the IRS. A red flag with them is the last thing I'm interested in having.
June 20, 201412 yr Gave the Packhouse a go last night. Took Mrs. TAC and TAC Jr. They both had a combo meal (meatballs on a pasta) and I had 3 sliders. Bill came to $41.50. Food was very good. Sodas were a little expensive @$2.50 with no refills. Service was solid and waitress would have earned around 20%. Figuring the meal without tip included would have been around $35.00, the price was fair and the girl got what she deserved. We will be back.
June 20, 201412 yr Author Gave the Packhouse a go last night. Took Mrs. TAC and TAC Jr. They both had a combo meal (meatballs on a pasta) and I had 3 sliders. Bill came to $41.50. Food was very good. Sodas were a little expensive @$2.50 with no refills. Service was solid and waitress would have earned around 20%. Figuring the meal without tip included would have been around $35.00, the price was fair and the girl got what she deserved. We will be back. ...this IS America, right?
June 20, 201412 yr From various posts it seems pricey for spaghetti and meatballs, particularly when you throw in the no refills. Don't know if we'll be trying it out or not.
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