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Message
re: No Tax on Tips has Servers Melting
Posted on 7/13/25 at 8:37 am to Jorts R Us
Posted on 7/13/25 at 8:37 am to Jorts R Us
quote:
Doubtful. Going for a big score with a corporation is time and work but a lot of tax departments are understaffed so smaller assessments aren't worth fighting. They could collect 10x what they can get from your single mom by just shitting out a letter to a 20B revenue company.
We see this be the case in reality though. The IRS consistently chooses to go over a mass of small dollars instead of policing the wealthy and large corporations. They take the 10k's in the aggregate over the 10m on its own. Furthermore, the agents on these cases are likely better served in performance evaluations to get some wins than be chugging along on 1 big fish.
They got all that extra money for enforcement and wasted time sending my parents a letter over ACA 1095c documentation that ultimately was the fault of one of her employers that year who sent her the form but never documented it with the IRS. My parents make barely above the poverty line with her work and my dad's SS. She didn't even have a damn gap in coverage. She was actually double insured for one month. What a waste of government enforcement effort.
This post was edited on 7/13/25 at 8:40 am
0
Posted on 7/13/25 at 8:43 am to beebefootballfan
quote:
Seen a few videos scrolling the facebooks today.
Seems they finally realized it’s a tax deduction.
They are either idiots or just making reaction videos for clicks/views.
quote:
They have been pocketing their cash tips and not claiming the income. Credit card tips are easily tracked by an employer. Its hitting them that they have to be honest with the IRS now and they are screwed.
Re-read what I just wrote because there's no reason for them to not continue pocketing cash tips.
Fun fact: I purposely tip in cash when possible just so they have the option of not getting taxed on it.
Posted on 7/13/25 at 8:48 am to Bard
You all clearly have never worked in a restaurant.
All tips must be reported even cash tips because the server has to tip share with other employees: hosts, food runners, bus boys, bartenders. If a server were to pocket their cash tips, the employer would know and the server would get fired for failure to tip share.
Once the cash tip is entered into the computer, it’s added to their wages for the night and taxed on their hourly wage paycheck.
All tips must be reported even cash tips because the server has to tip share with other employees: hosts, food runners, bus boys, bartenders. If a server were to pocket their cash tips, the employer would know and the server would get fired for failure to tip share.
Once the cash tip is entered into the computer, it’s added to their wages for the night and taxed on their hourly wage paycheck.
Posted on 7/13/25 at 8:55 am to Bard
quote:
Re-read what I just wrote because there's no reason for them to not continue pocketing cash tips.
Most tip earners have a final liability of $0 because their incomes are so low. As you mention, cash tips are not taxed, so reporting them leaves you with some amount owed. Claiming this today is stupid, because it's nearly impossible to trace and everyone knows it.
So unless you're earning $70K+ in takehome, you'll never claim these. Unless ...
Let's say your takehome was $150K. You work in a 5-star restaurant, most of your tips come via credit card anyway. Your final tax liability minus the standard deduction is ~ $12,000.
But you're clever, so you say "actually, I also earned $25K extra in cash tips." Now your final tax liability is $8,000, because while you'll pay $6K in additional income tax, you can now claim an extra $10,000 in itemized deductions. You just got $4,000 free from the government.
That's the edge case where people would claim cash tips, and it would be on tips they never received.
Posted on 7/13/25 at 8:58 am to beebefootballfan
Hey retard. If you pocket the cash you still aren’t paying any taxes just like in the past. The tax deduction will definitely help them on credit card tips that you can’t hide and which is how most people tip. Also, you are an idiot if you couldn’t figure this out.
Posted on 7/13/25 at 9:00 am to beebefootballfan
So they weren't paying tax on their tips anyway. Got it.
Posted on 7/13/25 at 9:02 am to jonnyanony
Its a deduction. Not a credit.
Posted on 7/13/25 at 9:12 am to simonizer
quote:
Its a deduction. Not a credit.
Well yes, I said as much.
Posted on 7/13/25 at 9:15 am to beebefootballfan
All that’s going to happen is they will continue to pocket cash tips and have the credit card tips still reported, just taxed less.
Posted on 7/13/25 at 9:16 am to jonnyanony
Again most of this will never be utilized since the average tip wage earner brings home less than $40K a year, tips included.
But in the scenario above, by reporting phantom income their liability shrinks because they can utilize the full additional $10K in deductions while only raising their liability by $6K.
But in the scenario above, by reporting phantom income their liability shrinks because they can utilize the full additional $10K in deductions while only raising their liability by $6K.
Posted on 7/13/25 at 9:17 am to beebefootballfan
You seem like you're no smarter than the people you're making fun of. How did you manage to do this? 
Posted on 7/13/25 at 9:26 am to bluestem75
quote:
You all clearly have never worked in a restaurant.
Wrong. In college I waited tables at a few places.
quote:
All tips must be reported even cash tips because the server has to tip share with other employees: hosts, food runners, bus boys, bartenders.
Wrong again. Some places choose to run that way, many do not. I know this from personal experience as do many others.
I did not work at any restaurants which shared tips. Neither I nor any of the other wait staff (that I know of) ever reported tips. Ever.
Posted on 7/13/25 at 9:32 am to beebefootballfan
quote:
Seen
You "seen" it?
If they never reported the tips before why would they report them now? This law has been in effect all of what, a week?
Posted on 7/13/25 at 9:52 am to L5ut1g3r
quote:
I think he meant “seended”!
Sir, the proper word is "seent".
Posted on 7/13/25 at 10:07 am to beebefootballfan
Most servers have zero tax liability.
Posted on 7/13/25 at 10:22 am to beebefootballfan
This sounds dumb. They can probably still skimp on reporting all of their cash tips, but get savings in their reported CC tips.
Posted on 7/13/25 at 10:37 am to Scruffy
You absolutely can do it, I did it for years, you only have to report 8% of your sales as made tips. So if you had 500$ sales you'd only have to claim 40$. Not only can you do it, 99% of servers do it. If I was still waiting this would change nothing about how I claimed my tips
Posted on 7/13/25 at 10:44 am to Bestbank Tiger
quote:
you get a percentage of the check so it's a cut even if you're pocketing cash tips.
yep - don't know how anyone could have thought otherwise - This would only be a 'big deal" for those whose primary income is from tips AND they have been honestly reporting it all along.
Those not reporting tips = how could it not being taxed help them at all??
perhaps it would mean that they wouldn't have to worry about 'getting cautht' = perhaps that is a plus in and of itself - plus make them not feel bad about all the years of 'cheating' they had already committed.
Posted on 7/13/25 at 11:29 am to L5ut1g3r
quote:The double comparative for seen is seent. But seened is close.
I think he meant “seended”!
Posted on 7/13/25 at 11:43 am to 1BIGTigerFan
quote:It doesn't. Most people paid in tips weren't reporting and paying taxes on them anyway. What this does do though is give their employers even less incentive to ever increase their base pay since this can be seen as a huge pay raise via tax decrease although none of them will see it. People may even tip less now too.
Why would the way they report their tips change?
This post was edited on 7/13/25 at 11:44 am
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