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mike37
04-22-2006, 09:35 AM
Just thinking about
when I go out to eat I leave a tip of 10to20% depending on serves sometimes more
now the waitress has to claim the tip as wages so
my question is can I wright of the tip as wages paid ????

HM
04-22-2006, 09:48 AM
Just thinking about
when I go out to eat I leave a tip of 10to20% depending on serves sometimes more
now the waitress has to claim the tip as wages so
my question is can I wright of the tip as wages paid ????
That is actually a great question, and the answer is both yes, and no. You will have a bunch of people come on and post that you should not screw around with shiat like this and just pay your fair share of taxes YOU GODDAMN TAX DODGER!!!! This is usually said by people in the 25% tax bracket and lower. They have no clue how unfair taxes really are as you are penalized for making more money. Hey, if we were ALL in the same tax bracket, that would be different. But the tax code truly penalizes those people who are successful. Now the "pay your fair share" tax people will usually chime in about an antedotal story about a trust fund baby who doesn't pay any taxes and never worked a day it his life.
Ultimately, talk to your tax person. If you actually go out that often that you are spending a significant chunk on tipping, then it might be worth it. Most tax people and cpa's will probably reccomend that you write it off under entertainment as part of your business. The down side to that is that the IRS only gives you 50% of the write-off on entertainment.

Mandelon
04-22-2006, 10:18 AM
Have the server sign a receipt form in triplicate so you can 1099 them at the end of the year....LOL

mickeyfinn
04-22-2006, 11:53 AM
If your CPA advises you to claim tips as wages paid, my advice would be to get another CPA. You have no requirement to tip that individual, they are not your employee. A tip is basically a gift for good service.
A tip is NOT a gift for good service. If it were it would not be taxable. Tips are expected and usually considered to be a part of your meal. Your tip is part of your servers wages as considered by the IRS. I don't know whether that makes it okay to claim on taxes or not, can you deduct the amount you pay someone to cut your grass? The libertarina party used to give out some small cards that you could put your tip in. This card explained to the server that "This is a gift from one individual to another. This is not payment for services rendered. As such it is not considered income under IRS XXXX.XX"
You could put your tip into this card and supposedly the waiter/waitress could keep that and their tip and not have to split with busboy or claim as tip income. That has pretty much gone by the wayside now since most restraunts autmatically claim 8% of the restraunts gross sales in the form of tips for the staff and report that to the IRS.

Throttle
04-22-2006, 12:01 PM
.02 more ... if a customer pays/tips with a credit card, the server must claim it as wages... cash is always best... tip your servers well!

HM
04-22-2006, 01:33 PM
Remember, you can claim a tax deduction on wages without issuing a 1099 when the income paid out is low enough....per individual paid. It is something like $200?
Anyways, I think Mike threw out a rhetorical question that was probably best anwered when drinking a few tall ones at the river. If Mike is paying out that much in tips that he actually wants to deduct it, then he should actually consider eating in and saving that money for gas this summer!!!

Mandelon
04-22-2006, 01:49 PM
Remember, you can claim a tax deduction on wages without issuing a 1099 when the income paid out is low enough....per individual paid. It is something like $200?
Anyways, I think Mike threw out a rhetorical question that was probably best anwered when drinking a few tall ones at the river. If Mike is paying out that much in tips that he actually wants to deduct it, then he should actually consider eating in and saving that money for gas this summer!!!
I think that's a $600 limit.
I think that gifted income is tax free up to $11,000??? But not deductible to the giver....

mike37
04-22-2006, 02:18 PM
my thing is that in Calif servers have 10% of there tickets added to there wages as income weather they get a tip or not
so if the government views a tip as wages then I'm paying a wage and it should be a wright off
this is just a conversation topic not a pore me I pay to much tax or anything

ROZ
04-22-2006, 02:21 PM
Don't for her worker's comp. :D
Her employeer pays for that..
Good idea Mandelon.. Going to start getting the socials of all the piza delivery drivers and start paying woth company checks :D