On 29-Feb-12 18:31, Adam H. Kerman wrote:
Stephen Sprunk wrote:
On 29-Feb-12 17:06, Adam H. Kerman wrote:
Stephen Sprunk wrote:
On 29-Feb-12 15:46, Adam H. Kerman wrote:
Stephen Sprunk wrote:
In the US, I rarely hear of restaurants not passing on tips to waiters,
but they _do_ have to take out taxes and report that income to the
gov't, whereas it's up to the waiter to report cash tips--and most
don't. This can add up to a significant difference in income for a
waiter, especially given all the special tax credits and such they can
qualify for by not reporting most of their income.

That law changed a long time ago. The employee reports both cash and
credit tips, not just cash, to his employer.

What the law says and what actually happens are often quite different.

Yes, Stephen. You still failed to note that the employee is required
to report ALL tips to his employer, not just cash tips, which is
why I followed up.

The _law_ may require them to report all tips, but what _actually
happens_ is often quite different.

You are still missing the bit that they are required to report ALL tips,
not just tips received in cash. ALL tips, including those via credit cards.
At the very least, the employer will compare the credit card tip reports
with his own records to see if they match.

The employee doesn't _need_ to report credit card tips to the employer
since the employer is the one that collects and passes on (minus
withholding) those tips to the employee. There may be some obscure
regulation requiring the employee to report that information back to the
employer, but all they would have to do is hand in copies of their pay
stubs, so it's just a waste of time.

The discussion above was obviously about _cash_ tips, which are an
entirely different matter. The employer (and therefore the IRS) only
knows what the employee _reports_, not what they actually _received_.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking