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"........therefore won't be taxed as income for you.
Not true!
The person you tipped out has to report what you gave them as their income.
That is right! The busser/bartender, when they clock out on the computer they will be asked to Declare Cash Tips?
Pretty simple, no?
No! I guess you didn't fully understand my example. Maybe at bar and grill's, or other inexpensive restaurants you will receive a majority of cash, not so at high-end or more expensive restaurants, even chains, where most of the bills and tips are paid with credit cards. All of your credit card tips are recorded automatically...they are in "the system" under your name. When you go to clock out, the computer asks you to...Declare CASH Tips? Hal already knows what credit card tips you received. So I reiterate, if you received all/or most of your tips on credit cards there is nothing you can do, but claim zero for cash, and after tipping out you would be taxed on money you did not leave with.
Pretty simple, yes?
The next time you work, if you make more cash you could try to adjust for this, but if most of the tips are continually on credit cards there is really no recourse and it would be confusing to try to compensate for this from shift to shift anyway. I don't know how long ago you are talking about, but my examples are from how things work recently(1990s-2000s) at a variety of establishments. At the end of your shift, when you clock out, Hal asks you to Declare Cash Tips?
The amount you declare IS NOT based on food sales like you said and it's not an across the board 10 percent. The amount you tip others IS based on food/bar sales. Here's a simple example...say you have only one table, and let's say it's a big one with a high-dollar ticket. You run the CC, but the guy forgets to sign it or write in a tip. The restaurant will get their money, but you will get the shaft. And, at the end of the night when Hal asks you to Declare Cash Tips? You will enter A BIG FAT ZERO! Not 10 percent of the high-dollar ticket.
I remember the good ol' days of declaring 8-10 percent. It all worked out quite nicely back then. I think that was back in the Jurassic period.
I have never ever worked anywhere where there was a place to deduct what you tipped out to others. This figured in when you declared your cash tips.
Not to belabor the subject...and yes, you are right in most of the stuff you've said. Not much I don't already know and you did misread a couple things. No big deal.
I don't waitress anymore. Had to quit a couple years ago but did it for about 25 years. I remember when we never had to claim any tips and only paid taxes on our paycheck. I'm glad they changed that though. The last ten years I waitressed I actually claimed ALL my tips. Before that, yes, I would deduct my credit card tips from my cash so it totaled the correct percentage. The reason I claimed all my tips was because I realized that if I didn't I was going to have a really measly social security check when the time came. I'm glad I did that because it's pretty measly as it is!
I have worked in every type eating establishment you can think of over the years. Everything from Mom 'n Pop places...my favorites...resorts, truck stops and chains. Every place I have worked, my tips were figured on the amount of food sales. If I sold $500 in food and had to report 10% that's $50. If my credit card tips were $30 then I would only report $20 in cash. If I tipped out $10 to a busser it showed up as a 'paid out' on my report slip and my taxable tips became $40. In actuality I would walk out the door with around $100 +/-. An average of 20% in tips.
When I tipped out bussers, which is really all I mostly had to worry about, I tipped them straight across 10% of what my tips were. Not what I reported but what I 'really' made. When I did have to tip out a bartender I tipped on the total cost of the drinks they made and I served. Usually another 10%. Bussers and bartenders made a lot more than my measly $2.17 hour and had other people tipping them out as well. And, yes, they do claim the money I give them but I don't have to claim the money I give them.
Thank goodness your last scenario has never happened to me. I've recieved tips from an unsigned credit card in the past.
Oh, and I don't know where you live, but in AZ we ARE required to report 10% of our sales as tips, across the board. Of course there's no law that says you can't report more.
I miss waitressing. Not the work so much but the people and the money!
My waitressing and having to declare only my cash tips must of all happened in a dream. In the dream, I declared ALL my tips too, because I'm honest and because of the social security thing that you mentioned.
It really hurt on those nights with all/or mostly credit card tips when I was taxed on money I didn't walk out with.......in the dream, that is!
My waitressing and having to declare only my cash tips must of all happened in a dream. In the dream, I declared ALL my tips too, because I'm honest and because of the social security thing that you mentioned.
It really hurt on those nights with all/or mostly credit card tips when I was taxed on money I didn't walk out with.......in the dream, that is!
The Dreamy Wench
I'm sorry your experiences weren't as positive as mine. But I'm glad mine were!
Hey, I'm dying over here! I need a menu pretty-pretty please with sugar on top!LMAO..... Can't you see this man is dying of starvation? I'll make it worth your while?LOL............ ****Nike's screech on the floor like a 428 Super Cobra Jet***** LMAO...............
Raena-That's the truth! If the person I'm with is not engaging, that signals the beginning of the end.
Last edited by saucywench; 02-08-2010 at 10:29 PM..
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So I reiterate, if you received all/or most of your tips on credit cards there is nothing you can do, but claim zero for cash, and after tipping out you would be taxed on money you did not leave with. 
Waitressing dream
