Do restaurant staff get taxed on tips now?

Question

I worked as a waitress in California 20 odd years ago and just pocketed my tips; I never had to record them or pay tax on them. Is it true that staff now have to record thier tips and get taxed??

I tip to give the waiter/waitress a bonus, not so that the Govt can take a cut!!

Answer 1

Technically, unless you are making min. wage or more, you are supposed to claim your tips on your taxes...but i went years without doing it, and never got in trouble, if you are worried about it, claim only a portion of what you make in tips...ie...credit card tips and some of the cash ones

Answer 2

yes they do -they must estimate the tip earning usually 9%.my brother in law got audited by the IRS for not claiming tips in Vegas for 5 yrs. he paid a hefty fine too!

Answer 3

At the end of a shift, the waitress is supposed to add up her tips and report them so the employer can adjust the hourly rate for that night.  So, yes most do report

Answer 4

We live in Florida and my daughter just started working at a high end restaurant where most people pay with their credit and debit restaurant wants to mkae sure its all recorded so the keep all the credit card tips and it goes on your pay check??!!never heard of such a thing.

SO now i have to remember to bring cash and pay with cash because thats why most people bartend/wait tables is to get the nightly cash.

Answer 5

Tips were always supposed to be reported as income.  Of course, most people will pocket the cash, but if someone left you a tip on a credit card you can't avoid claiming that.  Plus, if you claim no additional income from tips you could probably be audited.

Consider yourself lucky!

Answer 6

You have always suppose to have reported tips.

Answer 7

I worked in a family owned restaurant in Illinois for over 13 years.  I was both a server and a back end manager.  My primary duty as manager was tip compliance.  I had a template provided by the IRS that computed percentages for total tips claimed.  So the answer to the questions is...

YES, you must claim your cash tips according to the IRS.

If the overall percentage for claiming tips falls below their standard, it launches a red flag to the government that the tipped employees ( this goes for bartenders, dining room assistants and bar backs, too) are not properly instructed on claiming their tips.  The government's approach was to go after the small businesses over 15 years ago.  It was a lot of paperwork and a lot of careful tip claiming, for sure.

Answer 8

Yes. It's been this way for years. I've had to claim cash tips for 11 years that I've served. It's best to keep track of all your money info. What you made how much you tipped out your hours. Some places offer there employees little books that keep track of all that. I worked at a job that didn't keep track of my tipped out money (to bussers bartenders runners expo) all that. If you do tip out, then on your W-2 under retro pay it should have it recorded if not thats another reason to keep track of all that stuff.

Answer 9

Yes, always try to tip in cash so we don't have to report EVERYTHING though, just the minimum.

Answer 10

I am a waitress, and I don't claim my cash tips, but I don't have a choice about claiming my credit card tips. The computer automatically does it. So I get taxed on those.

Answer 11

Where I worked a until a couple months ago, the owners took 15% of your nightly sales, and that was the amount they reported for your tips.  They also gave you the option of adding up tips at night, and then reporting the real total to them, but nobody ever did that one.  I think it worked out in the end to our benefit (I hope!).  I know it definitely did on the nights I bartended.

Answer 12

What do you mean, NOW?  Uh oh.  The government taxes you on what your tips should be and it estimates; it's called allocated tips.

Check out this article - very informative!

http://www.bankrate.com/brm/itax/tips/20...