Do servers report all tips?

[LoveTrains]

Why are we taking a poll on this? Just curious.

[spindle92]

Nope.

[irene adler]

When I was a waitress, we were given an informal guideline to report tips to put our hourly rate to minimum wage.

[Deleted]

LOL

I do accounting for a few restaurants and the servers are supposed to report their tips nightly when they do their cash out for payroll purposes. None of them report cash tips, only credit card tips, and only because credit card tips are documented.

Perhaps they report them at the end of the year when they file their taxes.

[yentl]

When I was a server, I claimed 8.5% of my total food sales as tips. I was told I would avoid an audit that way.

No idea if that's legit advice. That was probably half of what I actually made in tips, though.

[mskitkat]

Lol, no. When I was a server I claimed my credit card tips or 10% of my tippable sales, whichever was higher.

[Deleted]

When I was a server, we had to report 8-10% of our sales worth of tips (depended on where I worked). You couldn't even cash out for the night unless you reported that percentage. I'd say the places I worked I made about 50-66% cash and the rest was credit card, and credit card was automatically reported anyway. That was typical and what most of my coworkers did, though I suppose it's possible some people reported all of their tips and just didn't admit it. 

[crashgizmo]

Some places I worked required 10%, some didn't care. I always did all credit card tips, and if that was more than 10% of my sales, then that was all I reported. If it wasn't, I reported enough cash to make it 10%. I did this for 12 years (ugh) and always got a tax refund.

[IrishBelle]

When I worked as a server, I never did. I'm pretty sure my coworkers didn't either.

[zarapipe]

Where I worked you did not have to report any.

[jwright]

When I was serving, I reported 10% of sales just for easy math regardless of how much I actually collected.

The Form 4070 that restaurants have to report to the IRS generally requires 8%.

I would say most servers report some but not all tips.

[puppylove64]

I always reported some, not all.

[spunkarella]

I repprted enough to get me to minimum wage, and kind of rounded up sometimes so it wasn't the exact same every night.

ETA: I did work somewhere very briefly with pooled tips. I reported/turned in all of those because I didn't want to steal from my coworkers. I'm pretty sure my coworkers didn't have the same scruples.

[changedname]

I assume anyone who works in a cash job doesn't report. Or at least, doesn't report everything.

[moolarkey]

Jan 27, 2015 11:29:28 GMT -5 milsaroo said:

Jan 27, 2015 11:27:53 GMT -5 LoveTrains said:

Why are we taking a poll on this? Just curious.

Will answer after more votes

how many more votes?

[Deleted]

Jan 27, 2015 12:34:17 GMT -5 changedname said:

I assume anyone who works in a cash job doesn't report. Or at least, doesn't report everything.

I think most report some, but few (very very few) report all.

[aurora]

I have no real information but am guessing the majority do not.

I'm also guessing the majority of us don't actually compute sales taxes on every single one of our internet purchases and send them off to our states at tax time.

[aurora]

Jan 27, 2015 13:32:41 GMT -5 milsaroo said:

Jan 27, 2015 13:30:40 GMT -5 aurora said:

I have no real information but am guessing the majority do not.

I'm also guessing the majority of us don't actually compute sales taxes on every single one of our internet purchases and send them off to our states at tax time.

State of Michigan will soon be doing this for Amazon.

Yeah, we have to do it for some purchases.  I'm guessing it will become integrated into the online purchase in more cases in the future.

[niq]

Jan 27, 2015 13:09:48 GMT -5 operagirl said:

Jan 27, 2015 12:29:26 GMT -5 Stan said:

I kept an excel (well, open office) spreadsheet when I tended bar.

I thought about reporting what everyone else was, which was CCs only, but then I realized that was lying to and stealing from America, and y'all know I couldn't do that (seriously).

Years ago when I worked for IRS compliance, we audited the restaurant, assumed only cc tips were reported, and then had a formula that had been tested in court to determine each server's unreported tips. This was pretty common in Vegas, NOLA, tourist areas.

There are arguments on both sides, of course: fairness to those getting fully taxable wages, legality vs. moral issue of poor struggling to make ends meet. I'm with Stan. 

You mean this board has two former IRS employees!

[mlvmd]

I used to when I served in high school. But I was making way over the minimum wage in my hourly rate ( which apparently is rare in the restaurant business) and felt like I should report all tips.

[msmerymac]

Jan 27, 2015 12:41:12 GMT -5 milsaroo said:

Jan 27, 2015 11:27:53 GMT -5 LoveTrains said:

Why are we taking a poll on this? Just curious.

Eta: the purpose was for my curiosity if there were other people that truly believe servers report every dollar

I'm assuming that person has never worked as a server, because as evidenced here, even servers who report all tips are well aware that many/most do not.

Either that or she feels that you are a very upstanding citizen.

[MadamePresident]

When I waitressed I work with a lady who made such good tips if she reported everything she would have ended up having a negative paycheck each week

[AAM2012]

Jan 27, 2015 13:59:41 GMT -5 Stan said:

I would love to work for the IRS! That's probably weird.

I would love to work for the IRS as long as I didn't have to take calls!

I also wonder how many servers even remotely understand what the reporting requirements are. Lord knows when I was hired at 18-19 years old I had ZERO clue and the manager said to just put a limited percentage.

[alleinesein]

Jan 27, 2015 19:58:23 GMT -5 MadamePresident said:

When I waitressed I work with a lady who made such good tips if she reported everything she would have ended up having a negative paycheck each week

Thats normal in the industry if you are being paid server min wage of $2.13 an hour.  When I worked for a restaurant in Denver the servers would never pick up their paychecks because they were either for $0.00 or just a few cents.  

[kcr1972]

My servers are required to claim the difference between 7.25. and 2.13 per hour..for every hour they work. Even if they dont make that much. It balances out throughout the week.

[tommygirl03]

Jan 27, 2015 13:46:55 GMT -5 niq said:

Jan 27, 2015 13:09:48 GMT -5 operagirl said:

Years ago when I worked for IRS compliance, we audited the restaurant, assumed only cc tips were reported, and then had a formula that had been tested in court to determine each server's unreported tips. This was pretty common in Vegas, NOLA, tourist areas.

There are arguments on both sides, of course: fairness to those getting fully taxable wages, legality vs. moral issue of poor struggling to make ends meet. I'm with Stan. 

You mean this board has two former IRS employees!

Make that 3. Although I'm still there, in exam. Awesome job, except for our budget woes. But I am in large case.

[v]

I think a LOT of people cut corners on their taxes where they think they can get away with it. So I assume that most people who earn wages in cash underreport. Including servers.

[M]

Jan 27, 2015 13:59:41 GMT -5 Stan said:

I would love to work for the IRS! That's probably weird.

I would want to too! Maybe I'll apply in a few years

I actually interviewed for a position with the a SEC a few months ago. It's still pending but I didn't feel like it was a good fit but it would have been cool to say lol. I also interviewed with the CFTC (the commodity markets version of the SEC) but they told me it would be a while before I hear back. I already accepted another position but that job would have been awesome...making sure people like my former self stayed in line lol. We always followed the rules, everyone else should too!