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  #76  
Old November 18th, 2009, 08:21 PM
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Default 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.
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  #77  
Old November 18th, 2009, 08:50 PM
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Default 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 Łber rude patron in front of his friends and business associates.
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  #78  
Old November 18th, 2009, 09:28 PM
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Default Re: Leaving A Tip When Eating Out...

Quote:
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.

Quote:
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.
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  #79  
Old November 18th, 2009, 10:44 PM
Honoruru Honoruru is offline
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Default 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 McDonaldís 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 thatís not the case (dollar-wise, it would most certainly be higher). So why this arbitrary 8%?

For me, since Iíve 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 wonít 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  
Old November 18th, 2009, 10:45 PM
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Default Re: Leaving A Tip When Eating Out...

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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  
Old November 18th, 2009, 11:22 PM
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Talking Re: Leaving A Tip When Eating Out...

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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.

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That's one of the things that makes HT so much FUN!

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Last edited by Kaonohi; November 18th, 2009 at 11:23 PM. Reason: Ek ong kar siri wha guru
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  #82  
Old November 19th, 2009, 12:14 PM
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Default Re: Leaving A Tip When Eating Out...

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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.

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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.

Quote:
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.

Quote:
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.
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  #83  
Old November 19th, 2009, 12:43 PM
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Default 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.
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Last edited by matapule; November 19th, 2009 at 12:53 PM.
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  #84  
Old November 19th, 2009, 05:06 PM
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Default Re: Leaving A Tip When Eating Out...

Quote:
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.
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  #85  
Old November 19th, 2009, 05:07 PM
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Default 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.
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  #86  
Old November 19th, 2009, 07:03 PM
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Default Re: Leaving A Tip When Eating Out...

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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."
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  #87  
Old November 19th, 2009, 08:53 PM
Kalalau Kalalau is offline
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Default 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  
Old November 19th, 2009, 09:01 PM
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Default Re: Leaving A Tip When Eating Out...

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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  
Old November 19th, 2009, 09:51 PM
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Default Re: Leaving A Tip When Eating Out...

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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!
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  #90  
Old November 27th, 2009, 08:00 PM
Fritz Fritz is offline
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Default 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.
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  #91  
Old November 28th, 2009, 12:49 AM
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Default Re: Leaving A Tip When Eating Out...

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Originally Posted by AlohaKine View Post
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.
Although it may be "rude", the reality is that it is an acknowledged form of tipping "shorthand" within the resturant business that says: "No I did not forget to tip you, and no I am not they type of person who never tips, but the reason you are not getting a decent tip is because you suck as a waiter/waitress". Leaving no money leaves the possiblity open that you are just a cheap customer. But intentionally leaving a few cents leaves the message that the wait help was baaaddd.
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  #92  
Old November 28th, 2009, 12:56 AM
Leo Lakio Leo Lakio is offline
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Default Re: Leaving A Tip When Eating Out...

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Originally Posted by Amati View Post
Although it may be "rude", the reality is that it is an acknowledged form of tipping "shorthand" within the resturant business that says: "No I did not forget to tip you, and no I am not they type of person who never tips, but the reason you are not getting a decent tip is because you suck as a waiter/waitress". Leaving no money leaves the possiblity open that you are just a cheap customer. But intentionally leaving a few cents leaves the message that the wait help was baaaddd.
That's how I've always seen it, too.

I remember one restaurant owner here in Seattle (long out of the business now) who, if he felt you left too small a tip, would chase after you once you left the premises. He would swear loudly about how cheap you were, and throw your tip money back in your face, telling you never to return.

It never happened to me, but I witnessed it happening, and a friend who worked there told me it was an occasional occurrence. I always wondered (1) what the owner did to compensate the wait-person who now got NO tip, and (2) what he would do about low tips left on credit cards?
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  #93  
Old November 28th, 2009, 02:17 AM
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Default Re: Leaving A Tip When Eating Out...

I had one incident with a waiter where I seriously thought he was going to harm me for not tipping. The look on his face when he looked at the receipt (where I'd crossed out the tip line) was truly frightening. Then he looked on the table and saw the tip in cash and the look went away in an instant. The sad thing is that he was a crappy waiter -- forgot our silverware, then kept ignoring us when I tried to ask for some, and got really annoyed when we wanted drink refills. I had every right to -not- tip him, but he probably would have waited for us to leave and then mugged us in an alley or something.
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  #94  
Old November 28th, 2009, 02:17 AM
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Cool Re: Leaving A Tip When Eating Out...

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Originally Posted by Ron Whitfield 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!
Not everybody takes the time to read all the links inserted in posts - especially when it's a subject of little interest and/or posted by someone who makes extensive use of links without an intro to the link.

Don't be surprised.

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  #95  
Old November 28th, 2009, 02:24 AM
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Lightbulb Re: Leaving A Tip When Eating Out...

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Originally Posted by Amati View Post
intentionally leaving a few cents leaves the message that the wait help was baaaddd.
Does this help anyone? Will the wait help improve their service (as we would hope)? Would they continue to take their frustration out on other customers (some who are intimidated into 15-20%), and others who would find 'another way?'

I like the idea of tipping for exceptional service, but we are expected to tip 15% for 'adequate' service and more for exceptional.

This is a custom which needs adjusting.

K
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  #96  
Old November 28th, 2009, 04:16 AM
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Default Re: Leaving A Tip When Eating Out...

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Originally Posted by Amati View Post
intentionally leaving a few cents leaves the message that the wait help was baaaddd.
Quote:
Originally Posted by Kaonohi View Post
Does this help anyone? Will the wait help improve their service (as we would hope)? Would they continue to take their frustration out on other customers (some who are intimidated into 15-20%), and others who would find 'another way?
Most likely it would not "help anyone". The purpose of tipping is not to help others [except, of course, to help the server who is able to put the tip into his pocket]. I do not think that most people who are in the process of tipping a server are concerned with the effects of the tipping outside of the direct relationship between the single server and the single customer in that one interaction (but if a customer has a favorite server, they might tip them extra each time to show appreciation for continuous good service). From my perspective as a customer, I don't use tipping a training mechanism, I use it as a "thank you for good service".

I probably tip +95% of the time. It is not even absent-minded service that makes me mad, it is a bad attitude that gets me fuming.
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  #97  
Old November 28th, 2009, 07:23 AM
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Default Re: Leaving A Tip When Eating Out...

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Originally Posted by Fritz View Post
I think the restaurant should pay their employees a wage and charge the diners accordingly. It's as simple as that.
That's the way it works in most US businesses, isn't it? Why are restaurants, taxis, and beauty salons different? Why don't those businesses pay their workers a decent wage?
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  #98  
Old November 29th, 2009, 04:42 AM
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Default Re: Leaving A Tip When Eating Out...

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Originally Posted by matapule View Post
That's the way it works in most US businesses, isn't it? Why are restaurants, taxis, and beauty salons different? Why don't those businesses pay their workers a decent wage?
Yes, that is in enteresting thing about those professions. It is almost like the employer considers the workers "on commission", and pays them a very minimum. The "commission" is in the form of a tip.

Meanwhile, to the customer, it comes out costing the same. The customer is paying the food costs plus the employee costs, just in two forms (tab plus tip).

And might as well add doormen, bellhops, and curbside airport porters to the list of "why aren't they just paid more instead of having the customer tip".
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  #99  
Old November 29th, 2009, 09:11 AM
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Default Re: Leaving A Tip When Eating Out...

Many restaurant workers prefer the tip system... well, the good ones that work in busy restaurants. My Mom's friends made so much money in tips that one was the breadwinner in the family with two kids, and the other remained single and bought three condos - one for herself, and two rentals.
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  #100  
Old November 29th, 2009, 10:44 AM
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Default Re: Leaving A Tip When Eating Out...

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Originally Posted by Sharilyn View Post
Many restaurant workers prefer the tip system... well, the good ones that work in busy restaurants. My Mom's friends made so much money in tips that one was the breadwinner in the family with two kids, and the other remained single and bought three condos - one for herself, and two rentals.
So maybe a 10% tip is fair?
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