Taxes on tips

[Old Crank]

2. Tips and income.

Tips aren't supposed to go to owners or management. I believe that is illegal.
When my ex worked at restaurants she always gave the bus people a piece of the action. She said they did a lot of stuff to make their lives easier. Non-pooling places.

Decades ago the IRS set the income rate for tips at 8% of the value of the meals. $1,000 of sales would means the server would be assumed to make $80 on tips. Credit card or cash. If you tracked all your tips you could declare the income. You would need to track all tips to get under the 8% assumption. The largest complaint I heard was from people who collected a lot of tips and the tax had to be pulled from their checks. Sometimes leaving close to nothing. (Especially true for places where the earingins were really small.

This law is going to be a huge pain and a farce. Many aren't going to see any gain because they fall under the taxable income limit.