Community Chat

[willdob3]

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@JeanLouiseFinchwrote:

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@willdob3wrote:

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@Carmiewrote:

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.

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@Carmie

I never tip people to supplement their income. Tips should not be an excuse to underpay anyone.

I tip people who have gone over and beyond what is called for by their job definition. I never tip with a credit card, always cash. I hope they do the right thing and do not report it. 

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I'm hoping this was accidental, @willdob3.

I'm disappointed in your stance on tipping.  Paying a low base salary is how it's done because employers know the public is usually aware of jobs where tipping is the norm.  People in the service industry don't make enough money in their base salary so they depend on the tips to pay bills.  Think about it, there's no way a waitress making a few bucks an hour w/o tips is going to be able to pay rent, a car payment, phone, groceries, etc.  If the entire service industry was redone to where tips weren't involved at all, prices would go up all over the place.  I'm thinking it would likely hit restaurants the worst and people would stop eating out since the owner would have to increase prices quite a bit in order to pay the staff a higher wage and pay the government his portion of the taxes on his employees' salaries.  

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@JeanLouiseFinch

I meant what I said. Tipping was never meant to be an excuse for low pay. Things need to change. Everyone should be paid a living wage. Tips should not have anything to do with what a person is paid. 

And I will never tip someone who does a poor job just because I think they don’t get paid well. 

This is all backward and incorrect as it is now.

[c_la_vee]

I never carry cash, well I do carry some but it's a hassle so I pay with my card for everything.

My husband does both but if he pays with cash, he pays for the whole meal like that not just the tip.

Do we enjoy public services like paved roads etc? People in the service industry should pay their taxes just like everybody else does.

Every single penny that I earn is taxed and I understand there are benefits that come with that, not just to me but to others that need it. JMO

[NYC Susan]

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@SeaMaidenwrote:

I want to add that back when I waited tables, we had to add up our sales  for the night.... all of the tables we waited on....and we were taxed a percentage (10 %)of that that we had to declare as tips.  So when I had a table stiff me...( no tip) or a table that tipped me less than 10%.... there were shifts that I came out often making very little.....I actually had to cover what the patron did not!

  What the cash tips allowed me to do was survive....  I was making $1.50 an hour back then and tips were my income....not my salary.  

The tips that were 20% or more..make up for the bad and NO TIP Patrons.   

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No one expects servers to live on what they're paid.  I think it's pretty commonly known that it's the tips servers receive that comprise the majority of their actual income.

That's why tips are supposed to be reported.  As you yourself said, it's your income.

[Jaspersmom]

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@Deaniewrote:

@Jaspersmom  We always leave a tip in cash. Not for any nefarious reasons but simply because most establishments pay a percentage of their sales to the CC company for the convenience of using the plastic money. And, they pass that on to the provider of the service be it wait staff or nail salon etc. Now, to address the other elephant in the room. Anyone who brags about not reporting cash income to the IR-S is a fool. There is much envy today in the world due to the existence of class w-rfare. If they choose to defraud the IR-S when then that is on them. They may or may not get caught. However, bragging about it certainly increases the likelihood of that happening.

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I wouldn't say they brag, but because I have a connection by being either related or close friends, you know stuff.  Sometimes people who know you well kinda spill the beans.  For example, in our state, we have a special program for a reduction in property taxes.  There is an enhanced program for people making under a certain amount of money.  When I mentioned to this friend that she wouldn't qualify because she makes much more than that, she told me she reports zero income and yes, she would qualify.  I'm not the IRS police, so I don't say anything, but between you and me, it irks me no end since I work my buns off and have a lot less than she does.  Her home is free and clear.  She and her family play games switching who owns what and I guess it's legal because it was all done by a lawyer and on the advice of her tax accountant.  Go figure.  Loopholes in the law.  

[kivah]

When the politicians pay taxes on all their free-bees, then servers should have to as well. I always leave cash tips - and call the server over to the table to hand it to her/him - so people in the restaurant don't steal it. Servers work very hard and earn very little..

[Venezia]

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@chrystaltreewrote:

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@Veneziawrote:

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@Shelbellewrote:

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

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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.   

Seriously?  What business is that of yours...lol   If you don't want to tip in cash, you do have the option of not tipping at all.  

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@chrystaltree- As a customer, I would have the right to ask why I was required to pay the tip in cash, if I was paying the bill by CC.  And, if I didn't bring cash with me to pay the tip?  Does the tech get stiffed?  Nice option.

I agree, however, with what another poster has already said.  I'd use a different salon.  I don't like anything that appears to be shady business practices and reading through the responses here, it seems others have knowledge of just that type of thing happening.

[Sooner]

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@Shelbellewrote:

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

Then they should worry about someone from the IRS getting their nails done. . . 

[Sooner]

I've learned that tax evasion is an accepted practice.  Honesty is only valued if you can "afford" it I guess.  

[sissel]

How many people carry cash.? Today my daughter had to take her dog to groomers she said got to get cash for tip cuz if you give them cash they do a better job & she also gets her nails done also stops for cash tip. I told her about this thread that I read today. Once they get to know you give a cash tip they are more happy. Now, I get it. I do with my hairdresser always give her cash too but never thought about the credit card taking out taxes. Also notice some resturants have changed their menu items a little higher cuz min wage went up in price? These people work hard & if I can run to atm & give them cash to make their day better I will do it.

[Shorty2U]

My daughter was a server until last year when she got a job at the school. Now my oldest granddaughter is a server (around part time college). 

As far as I know (but don't quote me) servers claim most of their tips but I don't think they have to claim all of their tips.

Now heres the thing, they make 2 something an hour (without tips). so they hardly take any taxes out at the restaurants.

For instance, this years taxes my granddaughter owes the government more than 1,200 dollars. Does she care?  NO. Why doesn't she care? She makes very good money (200 dollars in tips "a day", Of course its less if she works only a few hours or if its slow during snow season). 

Now my daughter always had dependents as a server and has  a house etc so her and her husband got a lot back in taxes. 

But servers who are slingle, and go the "short" form (like my granddaughter) pay in. It does not pay to lie because the IRS is full aware servers get tips, so they cant "not" not claim any tips or 'they'd be audited! 

PS) both my daughter and granddaughter worked/work at nice restaurants. People who work in "diners" for instance or places where meals are inexpensive don't make near the tips my daughter (and now granddaughter) made/make. 

PSS) DH and I always give cash tips because we know when you put the tip on the credit card servers usually have to wait to get their money until the books are done (maybe next day) where as cash is instant.

And we always tip at 25% since knowing servers only make 2 something an hour (which I find pathetic by the way, they deserve more and work extrememly hard).Also if  we go to breakfast and our bill is say 12 we give NO LESS than 5 dollars even though the tip at 25% on 12 is less than 5. . Again they deserve it. We have never shorted a server anywahere. 

But i can tell you there are people that short servers all the time, yes even for excellent service, and leave change and or no tip, just because some people are cheap and dont care. But most people are generous in tips.