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IRS Changes Rule On Tips.....

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

They seem to find plenty of ways to allow the super rich to hang on to theirs
 
It's hard to feel too bad for restaurants. It's one of the last cash businesses left, and hence ground zero for a lot of tax fraud. Restaurants tend to report as little cash as they can get away with, often using fake cash register read-outs to show less sales than cash receipts, which the cash register operator won't enter on a random basis, just pocket.

This is easy with owner run restaurants. Less easy with corporate franchises, since not only is the IRS, but the franchisor is looking over your shoulder. Still, where there's cash, there's tax fraud.
 
They seem to find plenty of ways to allow the super rich to hang on to theirs

Not really, no. They tax whatever they can get their hands on.
 
Not really, no. They tax whatever they can get their hands on.

Do you believe then that there are not advantages available to the wealthy only? Is that what you are saying?
 
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)
Since these tips were already claimed in full, it doesn't change their tax liability any.
Since adding these tips to the paycheck is a new thing, what was "not out of the usual" in the past isn't relevant to how things will be going forward.
 
Since these tips were already claimed in full, it doesn't change their tax liability any.
Since adding these tips to the paycheck is a new thing, what was "not out of the usual" in the past isn't relevant to how things will be going forward.

I should have been more explicit in my original post, my point to it was that servers will not be keen on added gratuities because it is not cash in hand. Sure it is a zero sum difference, but that is not how it will be viewed, it will be viewed as "lost money" much the same as the couple dollar hourly rate is typically viewed. Suddenly server are going to be very anti-gratuity, and of course will be wailing and gnashing of teeth over it.

edit: and in some circumstances, yes that gratuity might not find its way into the server's wallet until they either get their bill for the portion of health care coverage their wages did not pay, or in some circumstances the end of the year where it equates to less tax liability when filing.
 
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