How would you react to this (tax AND tipping related!)?

[tacosforlife]

We've started ordering grocery delivery because we're bougie as fuck.

I always include a tip on my online order. Today, the driver (who I don't think I've had before) was very nice but basically suggested I tip in cash in the future because tips included in the online order are part of their paychecks, meaning a) they don't get them for 2 weeks, and b) they get taxed.

I'm sympathetic to the 2-week issue because I realize that being a grocery delivery driver is not a high paying job (and I should probably increase my tip anyway), but um, the tax issue kind of had me going ^o). I mean, SURE, why WOULDN'T I help you evade taxes, amiright?

Or am I just too much of a rule follower? (Spoiler alert: yes.)

[mrsfarmer]

I would side-eye the fact that he said that in the first place. I can see the timing issue, but the tax comment was odd.

[v]

I think this is a very common preference, so it can be kept under the table.  My in-laws only ever tip people in cash for that reason.

But I'm totally with you on this one.

[Susie]

I'd have the same mix of reactions.

As for what I'd do next time? Confession: when I feel mixed about it, I do what's easier for me. Inevitably that is not cash, because I don't carry or keep much on hand.  For me to tip in cash I'd need to make a special effort to get cash from the ATM, and I wouldn't do that just so they could avoid paying taxes on it.

[Deleted]

you shoulda told the delivery person that you were an IRS agent. FOFL

[lurknomore]

I also like to see people pay their taxes. In the end, it hurts me when they don't. I actually pay $5 more every other week to my cleaning people for writing a check (i.e. leaving a paper trail) so that they have to claim it as income. Maybe that makes me unsympathetic. So be it.

[LoveTrains]

Dec 19, 2014 10:28:32 GMT -5 tacosforlife said:

We've started ordering grocery delivery because we're bougie as fuck.

I always include a tip on my online order. Today, the driver (who I don't think I've had before) was very nice but basically suggested I tip in cash in the future because tips included in the online order are part of their paychecks, meaning a) they don't get them for 2 weeks, and b) they get taxed.

I'm sympathetic to the 2-week issue because I realize that being a grocery delivery driver is not a high paying job (and I should probably increase my tip anyway), but um, the tax issue kind of had me going . I mean, SURE, why WOULDN'T I help you evade taxes, amiright?

Or am I just too much of a rule follower? (Spoiler alert: yes.)

This kind of shit pisses me off (the delivery driver, not you tacosforlife).

I do the same thing and tip in the order online. I do that because a) I never have cash and b) they should pay taxes on their earnings, damnit!

Not my problem if they don't get the tips right away. However, when we do go to a restaurant, if some people are paying cash and others are paying in credit card, I alwyas suggest that we include the full amount of the tip in cash. But that is only if cash is readily available.

Again, I never carry cash. Why should I inconvenience myself to help someone else avoid taxes? I am sympathetic to the fact that they don't receive the tips immediately, thought. I never thought of it that way. 

[tacosforlife]

Dec 19, 2014 10:33:29 GMT -5 @susan3589 said:

you shoulda told the delivery person that you were an IRS agent. FOFL

LOL. I was like, "Um, I don't really have a problem with the taxes because I do that for a living."

NOT TRUE, but whatevs.

[tacosforlife]

We actually even pay tax on our estimated tax-free online purchases because in law school, I read a case about an attorney getting disbarred for failing to pay taxes and one of the things used against him was that he'd taken a tax class in law school. I'm pretty convinced the bar won't give a shit that I came close to failing tax!

I also have zero sympathy when people complain about their state starting to charge tax on Amazon purchases, so at least I'm consistent! Pay yer damn taxes, people!

[Deleted]

Yeah, many people who work in tipping positions don't report cash tips. I only have one server who reports cash tips for payroll purposes.

But that information should never be relayed to the customer.

Although, being as so many people in these positions make shit wages, I can't blame them a whole lot. I guess that's my unpopular and possibly flame worthy opinion. If it comes down to me reporting cash tips or making ends meet and putting food on the table, the IRS can suck it.

He's still a douche though.

[UnderProtest]

I had a friend who was a waitress tell me this is also why they prefer cash tips. They only claim a small portion of their cash tips while the entire tip has to be reported on credit card transactions. From someone who was doing it while in college (and didn't need the money, mommy & daddy were providing plenty), I found it rather unsympathetic. Plus, I never seem to have cash so it isn't a possibility. It was rather forward of him to tell you that.

[LoveTrains]

Dec 19, 2014 10:38:06 GMT -5 tacosforlife said:

We actually even pay tax on our estimated tax-free online purchases because in law school, I read a case about an attorney getting disbarred for failing to pay taxes and one of the things used against him was that he'd taken a tax class in law school. I'm pretty convinced the bar won't give a shit that I came close to failing tax!

I also have zero sympathy when people complain about their state starting to charge tax on Amazon purchases, so at least I'm consistent! Pay yer damn taxes, people!

Many states offer a flat fee that you can pay, based on your income level, to cover out of state sales tax purchases. It is like a safe harbor amount. I always pay that amount on my state income taxes. I do enough shopping in Massachusetts, NH (no sales tax at all!) and online for sure. 

I often think about the tax when comparing prices of something B&M to something at amazon, too. Sure, that item might cost $5 less at Best Buy than amazon, but if I have to pay 7% sales tax it is going to be cheaper at amazon. 

[polarbearfans]

I usually tip in cash, even eating out. I hope they report their taxes! I read an article years ago that sometimes servers were having taxes withdrawn on money they didn't get because of people who didn't tip, or left low tips. The computer or something figured out taxes based on 20% of check. I don't know... it was years since I read the article and may be getting the details wrong. Regardless, it is always nice to be able to leave with cash in hand. plus it assures the money goes to the right person.

[tacosforlife]

Dec 19, 2014 10:40:07 GMT -5 LoveTrains said:

Dec 19, 2014 10:38:06 GMT -5 tacosforlife said:

We actually even pay tax on our estimated tax-free online purchases because in law school, I read a case about an attorney getting disbarred for failing to pay taxes and one of the things used against him was that he'd taken a tax class in law school. I'm pretty convinced the bar won't give a shit that I came close to failing tax!

I also have zero sympathy when people complain about their state starting to charge tax on Amazon purchases, so at least I'm consistent! Pay yer damn taxes, people!

Many states offer a flat fee that you can pay, based on your income level, to cover out of state sales tax purchases. It is like a safe harbor amount. I always pay that amount on my state income taxes. I do enough shopping in Massachusetts, NH (no sales tax at all!) and online for sure. 

I often think about the tax when comparing prices of something B&M to something at amazon, too. Sure, that item might cost $5 less at Best Buy than amazon, but if I have to pay 7% sales tax it is going to be cheaper at amazon. 

I forget how we handled it in WI. Why? Because my H handles the taxes. Because I cannot be trusted to handle the taxes.

This is why I can't get divorced: I'd have to load my own iPod and do my own taxes. NOPE. Can't do it.

[shopgirl07]

The tax part isn't your problem and he definitely shouldn't have mentioned it. But not getting their tip money right away is kind of a bummer for them. When I did grocery delivery, I always tipped in cash.

[SJ]

Yeah, don't tell me how to tip. Doesn't make me more inclined to tip well.

[aurora]

This makes me wonder: if I tip via cc at a restaurant, when does the server get it? That night, or next paycheck?

I'm also more sympathetic to the timing argument than the tax one, but timing is enough that if I have cash available I'll generally tip in cash.

[Deleted]

Just think of it as the poor person's version of a Cayman Island bank account.

[tacosforlife]

Dec 19, 2014 11:00:28 GMT -5 Stan said:

When I tended bar, I preferred cash tips because with CCs I had it split 50/50 with the other bartender. Yuck. I had a spreadsheet to track my cash tips for taxes. And I pay taxes on my online stuff too!

See, and when I was a host, I got tipped out so waitstaff underreporting tips hurt me.

[cheezer]

That pisses me off. I got the same thing at a nail salon. I whipped out my wallet, paid for the service on my CC, and went to add in the tip line and they asked for me to tip in cash. I said I didn't have cash and they said yes you do (I carry a men's wallet just with slots for CCs & I did have cash sticking out everywhere). But still, no. I'm not helping you get out of paying taxes and don't tell me what to do with my money.

[LoveTrains]

Dec 19, 2014 11:05:04 GMT -5 cheezer said:

That pisses me off. I got the same thing at a nail salon. I whipped out my wallet, paid for the service on my CC, and went to add in the tip line and they asked for me to tip in cash. I said I didn't have cash and they said yes you do (I carry a men's wallet just with slots for CCs & I did have cash sticking out everywhere). But still, no. I'm not helping you get out of paying taxes and don't tell me what to do with my money.

There are SEVERAL salons by me that won't even allow adding tips on the credit card. They don't have the line for it and they have big signs that say "tips only in cash."

Also my favorite NICE day spa near me only allows tips via cash or check, which is again, totally weird. I thought maybe at first it was because they didn't want to pay the merchant fee on the tips (2% of the transaction or whatever) but now that I think about it, I wonder if the true reason is all of this stuff. 

[tacosforlife]

Also, this is, I believe, the third time in a row that they were out of the deli turkey I ordered. But I have the "allow substitutions" box checked! There are like 30 kinds of deli turkey. I don't understand why they don't substitute another kind.

Last time, they were out of turkey AND EGGS. Seriously, you couldn't substitute another brand of EGGS?

I realize this isn't the driver's fault, but it's annoying. MY BOUGIE LIFE IS HARD, Y'ALL!

[sjh722]

Dec 19, 2014 11:07:49 GMT -5 LoveTrains said:

Also my favorite NICE day spa near me only allows tips via cash or check, which is again, totally weird. I thought maybe at first it was because they didn't want to pay the merchant fee on the tips (2% of the transaction or whatever) but now that I think about it, I wonder if the true reason is all of this stuff. 

The nice salon I used to get my hair cut at (which I do not go to any more because I can't afford $200+ cut and color) had this policy too. I know the hourly rate for a lot of stylists isn't great, but if you're doing several services a day and getting $20 - $50 cash tips on most of them, that's a lot of cash income.

[cheezer]

Dec 19, 2014 11:07:49 GMT -5 LoveTrains said:

Dec 19, 2014 11:05:04 GMT -5 cheezer said:

That pisses me off. I got the same thing at a nail salon. I whipped out my wallet, paid for the service on my CC, and went to add in the tip line and they asked for me to tip in cash. I said I didn't have cash and they said yes you do (I carry a men's wallet just with slots for CCs & I did have cash sticking out everywhere). But still, no. I'm not helping you get out of paying taxes and don't tell me what to do with my money.

There are SEVERAL salons by me that won't even allow adding tips on the credit card. They don't have the line for it and they have big signs that say "tips only in cash."

Also my favorite NICE day spa near me only allows tips via cash or check, which is again, totally weird. I thought maybe at first it was because they didn't want to pay the merchant fee on the tips (2% of the transaction or whatever) but now that I think about it, I wonder if the true reason is all of this stuff. 

Yeah most salons don't allow it at all.  Which drives me nuts b/c I hate carrying cash and especially small bills.  But I think it's for the reasons mentioned in the original post.

[Norticprincess]

Dec 19, 2014 10:57:19 GMT -5 aurora said:

This makes me wonder: if I tip via cc at a restaurant, when does the server get it? That night, or next paycheck?

I'm also more sympathetic to the timing argument than the tax one, but timing is enough that if I have cash available I'll generally tip in cash.

At my sister's it is in her next paycheck if you pay by CC. She actually likes getting things in her paycheck - she knows it has more than enough to cover her health insurance and taxes. It makes it slightly easier for to attempt to budget. Iirc she gets paid weekly. ---there since they split by cash by bar at the end of the night all of it is reported so the CC cover her taxes.



Eta.
The salon I go to does the cash only on tips. I just make sure to grab cash before I go. It seemed to be about the credit card fees.

[LoveTrains]

Dec 19, 2014 11:10:48 GMT -5 tacosforlife said:

Also, this is, I believe, the third time in a row that they were out of the deli turkey I ordered. But I have the "allow substitutions" box checked! There are like 30 kinds of deli turkey. I don't understand why they don't substitute another kind.

Last time, they were out of turkey AND EGGS. Seriously, you couldn't substitute another brand of EGGS?

I realize this isn't the driver's fault, but it's annoying. MY BOUGIE LIFE IS HARD, Y'ALL!

One year I ordered delivery for the Monday before Thanksgiving. I was making Thanksgiving dinner.

Those jerks were out of - and didn't substitute - stupid and essential shit like cranberries, potatoes, brussel sprouts, etc. WTF?!

[barefootcontessa]

I would give him cash. I have a soft-spot for people who work in low-paying service industries like this.

[barefootcontessa]

Dec 19, 2014 11:45:59 GMT -5 @songforyou said:

Dec 19, 2014 10:39:42 GMT -5 papiercherri said:

Yeah, many people who work in tipping positions don't report cash tips. I only have one server who reports cash tips for payroll purposes.

But that information should never be relayed to the customer.

Although, being as so many people in these positions make shit wages, I can't blame them a whole lot. I guess that's my unpopular and possibly flame worthy opinion. If it comes down to me reporting cash tips or making ends meet and putting food on the table, the IRS can suck it.

He's still a douche though.

This is where I am, too.

There are people making much more money than service workers paying than they ought to be in taxes.  I can't really get it up for some guy not reporting $5.  Plus, it's none of my business.  I usually try to tip in cash not because of taxes, but because it just seems like the easiest way for the person being tipped to get their cash.

I agree.  Giving cash is an accepted practice, whether he chooses to report the income is on him.  I am not going to go out of my way to police a grocery delivery man.      

[LoveTrains]

Dec 19, 2014 11:49:59 GMT -5 @songforyou said:

Dec 19, 2014 11:07:49 GMT -5 LoveTrains said:

There are SEVERAL salons by me that won't even allow adding tips on the credit card. They don't have the line for it and they have big signs that say "tips only in cash."

Also my favorite NICE day spa near me only allows tips via cash or check, which is again, totally weird. I thought maybe at first it was because they didn't want to pay the merchant fee on the tips (2% of the transaction or whatever) but now that I think about it, I wonder if the true reason is all of this stuff. 

My hair salon is the same.  This policy just started last year and it's so annoying, but most of the stylists do have their own personal squares they attach to their phones for the times I don't have cash/have time to stop for cash/forget to stop for cash.  I just figured it was a payroll headache.

Wow that is a smart idea!

[LoveTrains]

Dec 19, 2014 11:53:36 GMT -5 @littlemoxie said:

I thought it was common knowledge that people prefer cash tips for tax purposes. So really I'd be surprised at his balls for mentioning it.

However, I cannot begrudge someone in a low paying industry doing what they can to reduce their tax burden. They probably do not have the HDHP/401k/HSA and many other perks in their jobs that many of us benefit from (bot tax and non-tax related).

Yes, those are perks, but they are legal. Underreporting your income that you receive via cash tips is tax fraud. Maybe we should advocate for expanding those types of perks to everyone rather than encouraging tax fraud.  Not to mention, that it will mean that people's payments via Social security are lower when they retire if they have been under-reporting their income for years.