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  • #76
    Re: Leaving A Tip When Eating Out...

    Nuts, the 8% rule is a standard allocation, if actual tips are recorded it doesn't apply. Of course, actual tip totals usually exceed 8% and so go unrecorded.
    May I always be found beneath your contempt.

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    • #77
      Re: Leaving A Tip When Eating Out...

      Anyone who is interested in this topic should check out Waiter Rant, a very entertaining and informative blog written by former waiter-turned-bestselling author Steve Dublanica. Much of what he says is heartily endorsed by millions of fellow waiters. Here is one interview he gave last year while promoting his book.

      Note his comments about how waiters get their revenge against rude customers. In his book, Dublanica described the practice of spitting in the food as barbaric and that he personally would never stoop to doing something so crass. But he does talk about classier and more satisfying ways of getting even, like regretfully announcing to everyone at Mr. Obnoxious' table that his credit card has been declined, without so much as even bothering to swipe the card at the register. A perfect way to embarrass über rude patron in front of his friends and business associates.
      This post may contain an opinion that may conflict with your opinion. Do not take it personal. Polite discussion of difference of opinion is welcome.

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      • #78
        Re: Leaving A Tip When Eating Out...

        Originally posted by salmoned View Post
        Nuts, the 8% rule is a standard allocation, if actual tips are recorded it doesn't apply. Of course, actual tip totals usually exceed 8% and so go unrecorded.
        Oh! Before anyone thinks about jumping on Ed's "Underreporting your cash tips & raking in tax-free income" bandwagon, y'all might want to read this article first.

        Pssst. Want to hear about an occupation in which thousands of people earn up to $50,000 or more annually but pay very low taxes?

        Here's the deal: You too can become a restaurant waiter, join in the widespread practice of underreporting your tips, and, if you work your way up to a fine-dining gig, achieve an enviably high net income.

        But wait a minute - there's a fly in your soup

        The IRS can use a "reasonable estimate" of tips received by employees to calculate a restaurant's share of FICA taxes, per the Supreme Court's 2002 decision on US vs. Fior D'Italia.

        In this case, the court allowed the IRS's levy of an additional $23,000 against the venerable San Francisco restaurant for taxes on underreported tips, especially those paid in cash.
        This post may contain an opinion that may conflict with your opinion. Do not take it personal. Polite discussion of difference of opinion is welcome.

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        • #79
          Re: Leaving A Tip When Eating Out...

          I think the 8% thing is more like estimated tax payment or withholding taxes for businesses. I used to work in a restaurant, but that was ages ago. Back then, it was more an honor system. We would always report our tips (just not all of it ).

          My question is: How does the IRS decide which businesses fall under that 8% category? A McDonald’s or Jack-in-the-Box would certainly not be subjected to that. But a hot dog stand, or Starbucks (or similar style coffee stand), which has a tip jar, do they fall under that category? Also, different kinds of restaurants have different expectation of tipping. A fairly small and modest restaurant, with a few tables and table service, but also a lot of take-outs, probably would not take in very much in tips. The mid-level restaurants (upper middle quality, lower high-end quality), in my opinion, would take in the most tips (percentage-wise). For the very high-end restaurants, you would expect them to take in a higher take in tips, percentage-wise, but maybe that’s not the case (dollar-wise, it would most certainly be higher). So why this arbitrary 8%?

          For me, since I’ve worked in a restaurant before (and drove a taxi for about a month at one time) and once depended on tips, I usually tip more than my fellow diners. 20% is my usual, and it goes up or down from there. When I go to job-related lunches, and the bill has been meticulously divvied out, but what I see left on the table is less than what I would leave, I sometimes feel guilty, so I surreptitiously peel off additional bills and leave it on the table behind me.

          I also used to go to bars (I won’t tell you what kind), but tipping there is de rigueur; and it certainly makes up a larger portion of your final payment.

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          • #80
            Re: Leaving A Tip When Eating Out...

            Originally posted by Frankie's Market View Post
            Oh! Before anyone thinks about jumping on Ed's "Underreporting your cash tips & raking in tax-free income" bandwagon, y'all might want to read this article first.
            Everything I learned about waiters and income taxes came from this episode of Taxi, so I find this article to be shocking!

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            • #81
              Re: Leaving A Tip When Eating Out...

              Originally posted by sophielynette View Post
              That was very enlightening, thank you. I never realized they were taxed in that manner.
              Don't believe EVERYTHING you hear on HT!!!!!

              Follow up on the details, websites, etc.,and check them out yourself.

              All of us have made mistakes, and even believed in them.
              That's one of the things that makes HT so much FUN!

              K
              Last edited by Kaonohi; November 18, 2009, 06:23 PM. Reason: Ek ong kar siri wha guru
              Be Yourself. Everyone Else Is Taken!
              ~ ~
              Kaʻonohiʻulaʻokahōkūmiomioʻehiku
              Spreading the virus of ALOHA.
              Oh Chu. If only you could have seen what I've seen, with your eyes.

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              • #82
                Re: Leaving A Tip When Eating Out...

                Originally posted by sophielynette View Post
                That was very enlightening, thank you. I never realized they were taxed in that manner.
                You're welcome. Of course, if anyone is wondering about the accuracy of the articles that I cite, they can always check it against the info found on the IRS's official website, which makes it pretty clear that tipped employees are taxed based on the receipts that are brought in. Of that, there's clearly no doubt.

                Originally posted by Honoruru View Post
                I think the 8% thing is more like estimated tax payment or withholding taxes for businesses.
                If you go back to the website article I linked to in post #69, it has this to say regarding the 8% figure.

                The 8% Myth

                Don’t be misled by the 8% figure that is used in the Form 8027 discussed above. Just because this is the “threshold” number that the form uses to require you to allocate additional tip income does not mean that this is all you need to report to be safe from an IRS audit. The law requires your employees to report 100% of tip income and the 8% threshold is only one way that the IRS monitors compliance and flags under reporting restaurants.
                So as the writer says, the 8% is a minimum threshold. As the boldface part emphasizes, the tipped employess are supposed to report all of the tip income that they receive. The area of concern here is pretty much apparent. If a restaurant is consistently allocating tip income to a particular employee(s), then an IRS agent who is conducting an audit of the restaurants records may target that employee for closer examination. The logic is simple. Most restaurants go through busy and slow periods. If a server reports earning lousy tips month after month after month,...... and yet, continues to work in the same restaurant for a long period of time, why would that employee continue to stay in an establishment working for peanuts when he could be earning more money elsewhere? That kind of scenario will naturally raise suspicions about how honest the employee is being when it comes to reporting their tips. The normal expectation for a long-term employee would be that there should at least be some fluctuations between busy and slow periods, if not busy all the time. Why would any F/B server stay in one place working for minimum wage when the tips are always lousy,..... or so the server's tip record would have you believe.

                Originally posted by Honoruru View Post
                Also, different kinds of restaurants have different expectation of tipping. A fairly small and modest restaurant, with a few tables and table service, but also a lot of take-outs, probably would not take in very much in tips. The mid-level restaurants (upper middle quality, lower high-end quality), in my opinion, would take in the most tips (percentage-wise). For the very high-end restaurants, you would expect them to take in a higher take in tips, percentage-wise, but maybe that’s not the case (dollar-wise, it would most certainly be higher). So why this arbitrary 8%?
                The 8% accounts for the fact that Uncle Sam knows: tipped employees do get stiffed every so often. That's a fact of life for every waiter, even the good ones.
                This post may contain an opinion that may conflict with your opinion. Do not take it personal. Polite discussion of difference of opinion is welcome.

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                • #83
                  Re: Leaving A Tip When Eating Out...

                  Why is it presumed wait staff should be tipped, but not, say the person who does your dry cleaning? Should we tip the flight crew when they bring us our soda and bag of peanuts? I never could figure that out.

                  I owned some furniture stores once. I hired high school and college football players to deliver furniture during the off season. I paid them more than minimum wage. I told them to provide extra service for customers if requested and if tipped, I would not count it against their wages. Often when they delivered a sofa or bedroom set, the customer would want the total room rearranged (or take the old stuff out to the garage). Once they delivered a coffee table and the customer wanted furniture in the living room, bedroom, and dining room rearranged (for a coffee table!). Two guys spent 45 minutes doing this (move it over here - oh wait, move it over here, I don't like it there, etc. etc.). This is the only time in 10 years my delivery guys got tipped. The customer gave them each a dollar!

                  I'm having a hard time getting my head around this tipping thing.
                  Last edited by matapule; November 19, 2009, 07:53 AM.
                  Peace, Love, and Local Grindz

                  People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

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                  • #84
                    Re: Leaving A Tip When Eating Out...

                    Originally posted by Frankie's Market View Post
                    Oh! Before anyone thinks about jumping on Ed's "Underreporting your cash tips & raking in tax-free income" bandwagon, y'all might want to read this article first.
                    Huh? I never suggested under reporting tips. Even if I were to suggest it, what's the percentage of waiters audited each year? I'd heavily wager most waiters never encounter an IRS auditor throughout their careers, just as most of us the rest of us don't receive that distinction.
                    May I always be found beneath your contempt.

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                    • #85
                      Re: Leaving A Tip When Eating Out...

                      Now this is something to get pissed off about if you think tipping shouldn't be mandatory.

                      Tipping is a gratuity. When it's not, it becomes a surcharge.
                      Life is what you make of it...so please read the instructions carefully.

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                      • #86
                        Re: Leaving A Tip When Eating Out...

                        Originally posted by salmoned View Post
                        Huh? I never suggested under reporting tips. Even if I were to suggest it, what's the percentage of waiters audited each year? I'd heavily wager most waiters never encounter an IRS auditor throughout their careers, just as most of us the rest of us don't receive that distinction.
                        As Bob Dylan sang about Jersey, "Anything's legal, as long as you don't get caught."
                        This post may contain an opinion that may conflict with your opinion. Do not take it personal. Polite discussion of difference of opinion is welcome.

                        Comment


                        • #87
                          Re: Leaving A Tip When Eating Out...

                          I once got incredibly bad service in a restaurant. Fortunately I had a centavo with me: almost worthless. That was the guy's tip, I think leaving a contemptible pittance gets the message across better than leaving nothing at all. I usually tip 15 % minimum.

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                          • #88
                            Re: Leaving A Tip When Eating Out...

                            Originally posted by Kalalau View Post
                            I once got incredibly bad service in a restaurant. Fortunately I had a centavo with me: almost worthless. That was the guy's tip, I think leaving a contemptible pittance gets the message across better than leaving nothing at all. I usually tip 15 % minimum.
                            What's more insulting than leaving nothing is leaving a couple pennies or a nickel. I've never been rude like that but I've seen others do it.

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                            • #89
                              Re: Leaving A Tip When Eating Out...

                              Originally posted by Frankie's Market View Post
                              I can't believe there is no response to this assinine happening. Havn't read the full article and just to go off half-cocked on the thot of what it all may be, I hope there is major litigation against all involved.
                              How I would love for it to happen to me!
                              https://www.facebook.com/Bobby-Ingan...5875444640256/

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                              • #90
                                Re: Leaving A Tip When Eating Out...

                                I think the restaurant should pay their employees a wage and charge the diners accordingly. It's as simple as that.

                                If you get poor service, don't go back. I hate this tipping system.

                                Went to Japan recently. Service was excellent. No tip expected, no tips given.
                                Went to a business, ordered a frickin' meal. Ate it, paid for it and left. No guessing games, no hurt feelings.
                                You can apply any terms to any situation to suit your perspective.

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