my friend got a job as a server.
they pay him $2.13 an hour plus tips.
they said he suppose to turn in all tips on the end of his shift so they can deduct taxes from it. he gets his tips back at paycheck time.
is this normal? and how much do they take out? there is no state income tax, just federal.
2007-04-02 14:29:06 · 7 answers · asked by mricon 2 in Business & Finance ➔ Taxes ➔ United States
I've worked at many restaurants and have never heard of turning in your tips just to get them back on a paycheck.
Servers do claim tips and pay taxes on them, but the taxes are either deducted from your normal paycheck and/or paid at the end of the year. How much he owes in taxes will vary week to week as his tips, but they do seem to take out quite a bit - I've had paychecks that dropped from over $600 to barely $300 simply because of taxes.
2007-04-02 14:47:26 · answer #1 · answered by Ashley 4 · 0⤊ 1⤋
I worked in a relatives owned eating place in Illinois for over 13 years. i replaced into the two a server and a lower back end supervisor. My widely used accountability as supervisor replaced into tip compliance. I had a template presented via the IRS that computed opportunities for entire techniques claimed. So the answer to the questions is... confident, you will desire to declare you cash techniques in accordance to the IRS. If the familiar share for claiming techniques falls below their usual, it launches a crimson flag to the government that the tipped workers ( this is going for bartenders, eating room assistants and bar backs, too) are no longer good on the spot on claiming their techniques. the government's physique of recommendations replaced into to bypass after the small companies over 15 years in the past. It replaced into extremely some workplace work and intensely some careful tip claiming, for effective.
2016-10-02 02:05:15 · answer #2 · answered by gazdecki 4 · 0⤊ 0⤋
That's one way to handle it.
At the very least, employees are requied to notify their employer of all tips received in any month that they receive more than $20 in tips.
It sounds like his employer is ensuring that the tips are reported AND that there's enough $$$ to cover the withholdings from them.
Social security taxes will be withheld at 7.65% along with income tax at whatever rate is appropriate for his income and withholding exemptions.
2007-04-02 14:33:26 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Tips are taxed the same as any other ordinary income.
It's more common that he'd keep his tips and just report the amount to his employer, rather than actually turning in the tip money.
2007-04-02 18:40:10 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
Tips are taxed like any other income. Whatever percent they take from his $2.13 they take from the tips.
2007-04-02 14:33:04 · answer #5 · answered by irongrama 6 · 0⤊ 0⤋
He shouldn't have to turn in his tips, i have never worked anywhere that made me turn them in. Most places have you report your tips and they take it out of your paycheck. Where is he working?
I have worked at several different restaurants and have never handed over my tips at the end of the night. I have always filled out a form stating the amount of tips I pulled in. I know some places that give credit card tips at the end of the pay period but not the cash tips.
2007-04-02 14:33:01 · answer #6 · answered by Moosha 3 · 0⤊ 2⤋
Whether he turns them in or not, the Feds have a calculation on what they think he "should" get, and that will be added to his W-2 at the end of the year.
2007-04-02 14:33:11 · answer #7 · answered by Anonymous · 0⤊ 0⤋