I work in a restaurant that has a tip share program. Based on total sales the wait staff tips out the back and the front of the house i.e. the food runner, hostesses and in my case...the cook. My question is should the owner of the restaurant be taxing the tip share before it becomes a "whole" part of my declared income? I guess my concern is that if I'm taxed immediately on that nights tip share, say $25, isn't that going to lead to less taxes than if I'm taxed on say, $150 tipshare for the week or even worse on my total bi-weekly salary+ the tipshare earned withen the pay period (which is the case with me)? Confusing! Is anyone up to the challenge?
2007-10-07 23:32:01 · 3 answers · asked by taffy75 1 in Business & Finance ➔ Taxes ➔ United States
Assuming that you properly report your tip-outs, you'll only be taxed on your net tip income. Taxes are withheld from your paycheck and are based upon your gross income including net tips for the pay period. They are not withheld from your daily tips. In fact, the law only requires you to report your tips once a month.
Caution: Your tip-outs must list the name of the person receiving the tip-out!
2007-10-08 01:46:53 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
As a member of the restaurant community, and a member of the dining community, my training has always been: tip pre-tax. It has nothing to do with being cheap. You are paying for services rendered, not taxes incurred from such services. Usually the difference is minimal. I also tip on quality of service, but let management know if the service has been poor. The next schmoe doesn't need to suffer through the same thing I just did. Usually if your party is larger that 6 or 8 there will be a gratuity (tip) added on to the bill for you. That gratuity generally ends up to be around 18%. Check the bottom of the bill and the menu as most of them will clearly state this fact, so it will not be a surprise at the end of the evening. If you do have a question about it ask your host/hostess as they should know the answer. Below are two links that should clear up any etiquette questions you should have on tipping just about anyone in the service industry. There is also a link to buy a tipping card, which is handy to have instead of trying to calculate the tip in your head. Happy partying and tipping!
2016-05-18 22:40:53 · answer #2 · answered by ? 3 · 0⤊ 0⤋
Your income should only include the tips that you get to keep, not the ones that go to tipping out other people.
2007-10-08 03:52:35 · answer #3 · answered by Judy 7 · 0⤊ 0⤋