IRS Changes Rule On Tips.....

[jonny5]

In lower-end restaurants, wait staff gets stiffed by parties of SIX a lot of the time, much less parties of eight or more. If some one person isn't taking control of a large check that's split many ways, the math is usually wrong to the low side. And, heaven forbid, someone says, "Let's all just leave our tips separate." Then waitstaff gets stiffied worse. Ha!

Have you ever seen what a Little League team can do to a family restaurant? It ain't pretty.

If you've ever eaten in a place that automatically adds 15% to the bill on behalf of their waitstaff, and noted the absolutely horrible service that happens as a result, you'd know why tipping only makes sense.

So what? Why is other peoples tipping my problem? A tip should be a bonus for going above expected service. How often can you say that happens?

 

[jonny5]

Mornin J5. :2wave: Yeah I have seen others say the same thing about tipping. What do you think about this part of it?

Still, the ruling has caused some confusion. Some restaurants insert an amount on the tip line and then remind guests on the check that they are free to adjust that amount up or down. Ms. Dyson, the payroll tax attorney, said that practice could come under scrutiny from the IRS. "How far can you go before the IRS says that looks like a service charge?" Ms. Dyson says.....snip~

Just sounds like theyre making it even MORE complex. All the more reason to get rid of the income tax alltogether.

 

[MaggieD]

So what? Why is other peoples tipping my problem? A tip should be a bonus for going above expected service. How often can you say that happens?

It happens enough that restaurants have tried to protect their servers from cheapskates and mistakes. It's not "your problem." It's a topic for discussion. Sheesh.

 

[jonny5]

It happens enough that restaurants have tried to protect their servers from cheapskates and mistakes. It's not "your problem." It's a topic for discussion. Sheesh.

Thats what Im doing. Sheesh.

 

[Beaudreaux]

Would you explain "the problem with it" another way? I don't understand what you're saying here.

I just got back in a little while ago. Did anyone else ever pick this up and give you a better explanation?

 

[MaggieD]

Thats what Im doing. Sheesh.

Your discussion skills need honing.

So what? Why is other peoples tipping my problem? A tip should be a bonus for going above expected service. How often can you say that happens?

 

[jonny5]

Your discussion skills need honing.

As do yours, since youre spending all your time on ad hominems.

 

[274ina]

The solution is easy and simple.

eliminate servers special rules. All of them.

$15hr min wage.

Problem solved.

 

[The Man]

The solution is easy and simple.

eliminate servers special rules. All of them.

$15hr min wage.

Problem solved.

So then go ahead and open a restaurant and pay your employees $15/hour minimum. Put your money where your mouth is and lead the way 274ina.

 

[274ina]

So then go ahead and open a restaurant and pay your employees $15/hour minimum. Put your money where your mouth is and lead the way 274ina.

yes I would. But all other places have to pay the same wages........

Funny even when the floor is so low, living wages are working.

"Enter Moo Cluck Moo, a Detroit-area burger joint profiting while still paying its employees $12 an hour. Brian Parker, the restaurant’s co-founder, explained the philosophy behind paying workers more than the the state mandated-minimum wage of $7.40 an hour."

 

[opendebate]

IRS Rule Leads Restaurants to Rethink Automatic Tips
Gratuities Added for Large Groups Will Be Taxed as Service Charges

An updated tax rule is causing restaurants to rethink the practice of adding automatic tips to the tabs of large parties.

Starting in January, the Internal Revenue Service will begin classifying those automatic gratuities as service charges—which it treats as regular wages, subject to payroll tax withholding—instead of tips, which restaurants leave up to the employees to report as income.

The change would mean more paperwork and added costs for the restaurants—and a potential financial hit for waiters and waitresses who live on their tips but don't always report them fully.

Darden Restaurants Inc., owner of Olive Garden, LongHorn Steakhouse and Red Lobster, has long included automatic 18% tips on the bill for parties of eight or more at its more than 2,100 restaurants, but is experimenting with eliminating them because of the IRS ruling, said a spokesman.

The change comes amid increasing costs and record-keeping requirements for restaurants. In January, restaurants with 50 or more full-time workers will be required to offer health coverage to employees working 30 or more hours a week, though penalties don't begin until 2015.

Restaurants adopted automatic gratuities to help ensure that their servers—whose tips supplement a salary that is often less than the federal minimum wage of $7.25 an hour—weren't stiffed on large tabs. But many servers are likely to support dropping the practice because they don't like the idea of their tips being treated as wages, which requires upfront withholding of federal taxes, and means they won't see that tip money until payday.

IRS Rule Leads Restaurants to Rethink Automatic Tips - Yahoo! Finance

Well this change comes under the Obama Administration and was brought on 2012. What do you think about this new IRS change? Won't this affect lower wage earners and entry level people? The Poor and that so called made up Middle Class? Thoughts upon the Matter.

My first reaction is why do they always go after the little guys.

 

[opendebate]

The solution is easy and simple.

eliminate servers special rules. All of them.

$15hr min wage.

Problem solved.

Or how about instead of sucking every penny you can out of the little guy close some of the loopholes for corps and the uber rich.

 

[ttwtt78640]

My first reaction is why do they always go after the little guys.

Because that does not reduce campaign contributions.

 

[opendebate]

Because that does not reduce campaign contributions.

:rock I looked for a bulls-eye emoticon but I couldn't find one.

 

[marduc]

The only practical impact on servers is that they will have to wait 'til payday to receive the automatic gratuities. They are not losing any income.

Unfortunately, most servers will not be budgeting on a pay check at all, they expect to make $x to pay bill Y and Z over the weekend. Suddenly they have to wait a few weeks to see that money (if they see it at all on their paycheck.. it is not out of the usual that it gets gobbled up by taxes or insurance and is a big fat $0.00 check)

But, for most of them, they're in the 47-48% who pay no income tax at all. If they're now finally paying into SS and Medicare more fairly, I sure don't have a problem with it.

Those without kids will typically end up paying something towards income tax at year end, Its the child credit that gets most everyone out of it .

 

[The Man]

yes I would. But all other places have to pay the same wages........

But you need to lead the way, show them it can be done. Then they'll do it too.

Funny even when the floor is so low, living wages are working.

"Enter Moo Cluck Moo, a Detroit-area burger joint profiting while still paying its employees $12 an hour. Brian Parker, the restaurant’s co-founder, explained the philosophy behind paying workers more than the the state mandated-minimum wage of $7.40 an hour."

So they're only paying $12/hour. Why not $15/hour like you suggest?

 

[274ina]

But you need to lead the way, show them it can be done. Then they'll do it too.



So they're only paying $12/hour. Why not $15/hour like you suggest?

Cant lead the way. Dont have the $1.5 mil needed to sell a $1 burger in stupid USA fantasy economy.

it shows it can be done.

 

[The Man]

Unfortunately, most servers will not be budgeting on a pay check at all, they expect to make $x to pay bill Y and Z over the weekend. Suddenly they have to wait a few weeks to see that money (if they see it at all on their paycheck.. it is not out of the usual that it gets gobbled up by taxes or insurance and is a big fat $0.00 check)

I've always had to pay taxes on 100% of my pay, so sorry, I'm not going to have a pity party for servers if they now have to pay taxes on 100% of their pay. If they don't know how to budget, that's their problem. There is professional help available for that.

 

[The Man]

Cant lead the way. Dont have the $1.5 mil needed to sell a $1 burger in stupid USA fantasy economy.

it shows it can be done.

What shows that what can be done?

 

[274ina]

What shows that what can be done?

it shows that a joint can pay a living wage, and still be profitable.

justl ike the corps did without child labor and are profitable...............

 

[Henrin]

Government: I see you are making money over there. Where is my cut?

 

[Henrin]

My first reaction is why do they always go after the little guys.

They go every last instance of someone making money.

 

[opendebate]

They go every last instance of someone making money.

I'm sorry, I'm not sure what you are saying here.

 

[marduc]

I've always had to pay taxes on 100% of my pay, so sorry, I'm not going to have a pity party for servers if they now have to pay taxes on 100% of their pay. If they don't know how to budget, that's their problem. There is professional help available for that.

I never said anything regarding whether or not servers should pay taxes on 100% of their income, and I agree they should. With automatic gratuities and charge tips they already are paying 100% anyhow as was already pointed out in this thread.

Good straw man though.

 

[Henrin]

I'm sorry, I'm not sure what you are saying here.

The government won't let you make money without figuring out a way to tax it.