How are you supposed to claim tips in Michigan?

Question

I just started waitressing. I'm not sure how the tips work. I was told to claim $4.50 for every hour I work. There have been days in which I had to claim all of my tips, and walked out with little more than five dollars in tips for the whole day. I'm so confused, because I don't know if I'll get the money backat the end of the year, or if I'm going to end up paying a percentage of it! how do the tax laws work in Michigan? what do I do if I don't break even or even make minimum wage! is my boss supposed to compensate me if my tips don't meet minimum wage! help! I'm not making any money! IM DYING HERE!!!

Answer 1

This is not right your employer is using that figure so that he doesn't have to pay you the current minimum wage.

From the the minimum wage and overtime law of the State of Michigan:

TIPPED EMPLOYEES: The Act permits tipped employees to be paid a minimum of $2.65 per hour when tips are received, combined with the employee's hourly rate, equal the required minimum hourly wage rate. A written tip statement signed by the employee AND dated before the date the paycheck was received must be maintained by the employer for each pay period that tips are reported. The state’s minimum wage rate applies to all tipped employees, including employees of otherwise federally covered businesses, when an employer takes a tip credit because the state wage rate for tipped employees exceeds the federal minimum rate.

The State minimum wage as of July 1, 2007 is $7.15. Your employer is telling you to report $4.50 per hour in tips so that he doesn't have to pay you the minimum wage.

It's up to you but I would consider contacting the Wage & Hour Division of the Dept of Labor at 517-335-0400

Answer 2

100% of tips are taxable income. Your employer is having you do something illegal if they say to claim $4.50 an hour for tips. You are required by federal law to claim ALL of your tips on your tax return, and to report them to your employer. And yes, if your tips and your hourly pay don't add up to the minimum wage for non-tipped employees, the employer must make up the difference.

Answer 3

All tips you receive are income and are subject to federal income tax. You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement.

You must do three things. 1. Keep a daily tip record. 2. Report tips to your employer. 3. Report all your tips on your income tax return.

There are two ways to keep a daily tip record. You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit card charge slips.

You must report tips to your employer so that: Your employer can withhold federal income tax and social security and Medicare taxes or railroad retirement tax.

Report to your employer only cash, check, debit, or credit card tips you receive. If your total tips for any one month from any one job are less than $20, do not report the tips for that month to that employer.

If your employer does not give you any other way to report tips, you can use Form 4070. Fill in the information asked for on the form, sign and date the form, and give it to your employer. To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244.

Give your report for each month to your employer by the 10th of the next month. If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday.

Report your tips with your wages on line 1 of Form 1040EZ or line 7 of Form 1040A or Form 1040.

You must report all tips you received in 2007 on your tax return, including both cash tips and noncash tips. Any tips you reported to your employer for 2007 are included in the wages shown in box 1 of your Form W-2. Add to the amount in box 1 only the tips you did not report to your employer.

Answer 4

You claim the tips as income just like every other state in the country.

Answer 5

You're supposed to claim what you actually get. If you don't, it's actually tax fraud. On the upside, chances are slim that they'll prosecute - but it could happen and Federal Prison might be fun.

Answer 6

probable so all taxes and extra will be deducted so he received't be held responsible. shop records and straighten it out on your each and each and every year tax kind and extra deductions will be back.