I work for a restuarant that requires you to report all of your tips. While I haven't reported every single dollar, a vast majority has been reported and I was told we get our tips back along with the state and federal taxes that were taken out. It's my first time working as a server so I'm not sure how I should go about filing my taxes.
2007-01-09 16:29:52 · 11 answers · asked by twingyrl 1 in Business & Finance ➔ Taxes ➔ United States
No, not necessarily. Tips count as "earned income."
If you made below a certain amount, yes, you are going to get your tips back just because you won't have made enough to pay any taxes (and, instead, will be getting a refund).
However, if you're getting some serious tips at a classy establishment, you may well end up paying income tax on them.
2007-01-09 16:39:05 · answer #1 · answered by Target Acquired 5 · 0⤊ 2⤋
You are required to report your tips. It is NOT true that you get them all back in a tax refund, since you already kept them (reporting tips is not the same as giving them away).
The refund of your state and federal taxes comes from the income taxes that were already taken out of your pay during the year, and any tax credits you may be eligible for (like the earned income credit).
2007-01-13 16:30:02 · answer #2 · answered by Anonymous · 0⤊ 0⤋
It depends what your total income is for the tax year. At a certain income level, you will have to pay taxes just like the rest of us. And most likely, you won't be getting all the federal and state taxes that were deducted back either. And kiss those FICA contributions away too.
The restaurant is required by law to report tips as income. Although restaurants are notorious for not reporting 100% tips to the government, so who knows if this is actually being done.
2007-01-09 18:32:56 · answer #3 · answered by derekeb_yft 2 · 0⤊ 1⤋
You do not get a refund based on reported tips, but your tips can result in you qualifying for credits. Depending on your income, you may get some or all of the taxes withheld back.
You are required to report all tips to your employer in any month when you receive more than $20 in tips.
If you have reported all your tips to your employer, then your W-2 will correctly show your income, and you will have paid the correct Social Security and Medicare.
If you have unreported tips then you must fill out Form 4137, report the tips as income, and pay Social Security and Medicare tax on the unreported tip income.
2007-01-10 01:34:48 · answer #4 · answered by ninasgramma 7 · 0⤊ 1⤋
it truly is a nasty device and under no circumstances one that's following in different civilised countries. All countries want a minimum criminal set hourly cost of pay with the intention to provide someone a reliable income. How's that man or woman ever going to get a private loan for a house or vehicle in the journey that they could't tutor standard income? In Australia minimum criminal salary is $16 an hour for adults. In New Zealand minimum criminal salary is $13.50 an hour and that is regardless of age you're. Tipping is optionally available on right of that. I analyze a united states of america citizen who immigrated to Australia and reported he couldn't believe how a lot less annoying his existence became not having to be counted on information for a residing! Very primitive device and basically imagine of all the money the authorities misses out on in tax from the business business enterprise and worker if there is not a criminal minimum set salary!
2016-10-17 00:36:56 · answer #5 · answered by ? 4 · 0⤊ 0⤋
You must report all of your tips. It is counted as part of gross income and yes you will be taxed for it. The person who said she only reports 10% of her tips may be looking at some serious auditing if she is not reporting her full tip income.
2007-01-11 07:44:39 · answer #6 · answered by Anonymous · 0⤊ 0⤋
First of all, you are not required to report all of your tips. Because waitressing pays you less than minimum wage you are required to report 10% of your tips to make up for your wage. If you make 150$ in a shift then you are only required to report 15$ in tips. You will get taxed on that 10% though so you may get some back at tax time. Now, if you report more than that you will get more money taken out of your check for taxes and it may or may not increase your refund at tax time. It depends on how much you make and how you pay in taxes.
2007-01-09 16:39:27 · answer #7 · answered by freakyallweeky 5 · 0⤊ 3⤋
Tips count as earned income. You are required to report all your tips, and to pay tax on them. You would not get them back.
2007-01-09 17:39:36 · answer #8 · answered by Judy 7 · 1⤊ 1⤋
I think something sounds fishy to me. It was a while back,
but when I served tables and we had to report tips....these
tips became part of our gross income and was taxed the
same as our salary. There may be a new ruling that exempts
tips now but I'd check with whoever does your payroll, or
call H & R. Block--they would tell you.
2007-01-09 16:51:38 · answer #9 · answered by Anonymous · 0⤊ 2⤋
If you are a mom, I would say yes, if not... I'm not so sure.
I have always received a fat return, every year, since I have been a server.
2007-01-09 16:39:14 · answer #10 · answered by BigTip$ 6 · 0⤊ 3⤋