topic Re: Tipping restaurant servers: Interesting in Community Chat

Tipping restaurant servers: Interesting

granddi — Sat, 03 Mar 2018 15:53:46 GMT

We were eating at a chain restaurant called Salt Grass and our group was discussing tipping. So I asked the server a question that was discussed.

We asked her: Do you get the full amount of your tip that we put on the credit card slip? This is what she said.

Wow, I am so glad you asked me that.We wish more people understood this. The short answer is yes but.......they do not get the tip in cash. The amount of the tip on the credit card is subject to the usual withholding/taxes. So if you leave 20% by credit card the server get that amount less the taxes vs the full amount if you leave cash. She said we are not ever permitted to ask customers for cash vs leave on credit.

I recently paid Toni and Guy Salon by cc and they asked about tip. When I said $10.00 they ran my card and handed me the $10 and the envelope for the stylist. Must be the same issue of withholding taxes

Re: Tipping restaurant servers: Interesting

kaydee50 — Sat, 03 Mar 2018 15:55:42 GMT

I was told long ago that servers prefer the tip in cash which I try to do as often as I can.

Re: Tipping restaurant servers: Interesting

henderson — Sat, 03 Mar 2018 16:01:24 GMT

I thought all tips, cash or credit card are subject to the server reporting them when they file their taxes. This sounds like when someone is being "paid under the table" as they receive cash and they don't report it. If I'm wrong, would someone please set me straight.

Re: Tipping restaurant servers: Interesting

GCR18 — Sat, 03 Mar 2018 16:09:24 GMT

I have never given it much thought, but have friends that charge the meal and leave cash for the tip. I usually pay and tip in cash.

Re: Tipping restaurant servers: Interesting

TheMemphisVette — Sat, 03 Mar 2018 16:10:44 GMT

tips are taxable income. people do not report it and think that is ok.

neither do people pay the state sales tax themselves if sellers do not collect it. they actually think they do not have to.

Re: Tipping restaurant servers: Interesting

StylishLady — Sat, 03 Mar 2018 16:12:40 GMT

Tips should be considered as a gift---tax free.

Re: Tipping restaurant servers: Interesting

Carmie — Sat, 03 Mar 2018 16:13:05 GMT

Tips are considered income and are subject to taxes, even if they are given in cash form.

Often a tip is figured in by the resturant for tax purposes weather one was left or not. For example, 15% might be added to their actual wages on paper to cover the tips that they were expected to receive. Their W2 will have the 15% extra added on even though some people leave more and some less. It’s supposed to average out.

Re: Tipping restaurant servers: Interesting

Bri36 — Sat, 03 Mar 2018 16:15:07 GMT

I don't think tips should be taxed either.

I try to tip in cash when I can.

Re: Tipping restaurant servers: Interesting

JeanLouiseFinch — Sat, 03 Mar 2018 16:19:37 GMT

Tips are income, thus taxable, though I think probably the majority of people in service jobs where tipping is done in cash don't claim it. It's dishonest but people do it. When the tipping is done on a credit card, the owner of the establishment is obligated to report it and take the required withholding out because he/she has to send that into the fed and state.

Re: Tipping restaurant servers: Interesting

henderson — Sat, 03 Mar 2018 16:20:12 GMT

I googled this: If you receive cash tips in the course of your job, the IRS requires you to report them, whether you receive the tips from a customer, from another employee, your employer or from a tip pool. Servers who receive tips as part of their job are supposed to report the total to their employers and to the IRS on their annual income tax returns.

Re: Tipping restaurant servers: Interesting

JeanLouiseFinch — Sat, 03 Mar 2018 16:27:17 GMT

@StylishLadywrote:
Tips should be considered as a gift---tax free.

@StylishLady Tips aren't gifts. A gift implies nothing has been received by the giver or done by the recipient who is receiving the tip. In a tipping situation, the giver is tipping because they received good service from the tip recipient (waitress, hairstylist, cab driver, bell hop, etc).

Re: Tipping restaurant servers: Interesting

Venezia — Sat, 03 Mar 2018 16:24:51 GMT

@StylishLadywrote:
Tips should be considered as a gift---tax free.

I disagree - tips are part of a server's income. That's why they receive a lower hourly wage than the mandated minimum wage.

If someone mowed your lawn, plowed your driveway, or performed any other of a myriad of self-employed services, would you consider all that income as a gift, too, because you paid in cash? No, it's payment for services rendered; income. No different.

Anyone in the serving industry (of any kind) knows that tips are considered income for tax purposes. Whether they declare it, as they should, is another matter.

Re: Tipping restaurant servers: Interesting

MUNCHIE — Sat, 03 Mar 2018 16:27:57 GMT

I recently talked to a waitress at a nearby restaurant, she has worked there for years. They started using computers about a year ago. They each enter their own sales,,this is under their social security number. If they receive a 10 per cent tip, they lose money since the total sale is sent in under their ss number and the IRS will tax them on the regular 20 per cent which most people leave. so in other words she is the one who loses..Mostly because she must give 10 per cent to the bar tender, if you order a drink, and also 10 per cent of the tip to the person who cleans the counter. These last two make more money , because of this , than the waitress.

Re: Tipping restaurant servers: Interesting

Shelbelle — Sat, 03 Mar 2018 16:28:16 GMT

My nail salon has a sign hanging up that says, Please tip in cash.

Re: Tipping restaurant servers: Interesting

OKPrincess — Sat, 03 Mar 2018 16:28:17 GMT

Interesting. Didn’t know the tip was taxed if left on credit card. DH and I do both.

Re: Tipping restaurant servers: Interesting

cherry — Sat, 03 Mar 2018 16:29:05 GMT

I think our servers at our local diner must claim their tips, because they don't seem to have a preference, for how they are tipped

Re: Tipping restaurant servers: Interesting

Venezia — Sat, 03 Mar 2018 16:35:22 GMT

@Shelbellewrote:
My nail salon has a sign hanging up that says, Please tip in cash.

Which tells you that they certainly aren't declaring the tips as income! I would be asking them why I had to tip in cash, if I was paying with a CC otherwise. Be interesting to hear their answer.

Re: Tipping restaurant servers: Interesting

Shelbelle — Sat, 03 Mar 2018 16:37:48 GMT

We always pay in a restaurant with a CC, my DH always leaves the tip on the CC.

Re: Tipping restaurant servers: Interesting

Mominohio — Sat, 03 Mar 2018 16:41:37 GMT

We have gone to paying only cash for eating out. If we don't have cash, we don't eat out. I hate paying a bill later for something that is already gone.

Even when we did charge, I always left a tip in cash.

Tips are taxable, but here's is how I see it, after working on my feet in the restaurant (fast food during high school and college), and retail industries all my life. I'm going to give over worked and under paid people a cash tip based on the quality of service I've been given by them. If they choose to not claim it, or to not claim all of it, I can live with whatever they decide.

Re: Tipping restaurant servers: Interesting

LexPex — Sat, 03 Mar 2018 16:55:56 GMT

lovethe desert, I am sure you are correct that the servers probably don't report the cash tips or only some of the $$$. If you made per hour what they do, I am sure you would have a better understanding.

DH and I always leave our tips in cash and most of our friends do also since many of us have had daughters/sons etc that were servers at some point...my three children did so both in high school and in college. They appreciated any tip.