Wonder how the TiW may be affected...

[Hunclemarco]

Hello

Saw this article, wonder how this may affect the TiW card in the future. Any thoughts?

http://finance.yahoo.com/news/irs-rule-leads-restaurants-rethink-230200664.html

(monitors, posted it here since many DVC members use it, if i needs to be relocated, i apologize)

 

[Simba's Mom]

I read it and I'm shocked, shocked I say! I'm an income tax preparer and they're actually saying that some servers aren't fully reporting their tips. People lying about their income-say it ain't so! I see this as a way for the government to catch up with people and make it harder to cheat. I agree, it will be interesting to see if the automatic 18% gratuity is eliminated. DH always liked that it was there, but it may cause too much work in the future.

 

[Doug7856]

I read it and I'm shocked, shocked I say! I'm an income tax preparer and they're actually saying that some servers aren't fully reporting their tips. People lying about their income-say it ain't so! I see this as a way for the government to catch up with people and make it harder to cheat. I agree, it will be interesting to see if the automatic 18% gratuity is eliminated. DH always liked that it was there, but it may cause too much work in the future.

I agree! Not surprising. I'm also guessing that since it's part of the wages, the employer will have to pay Social Security taxes on those wages.

I personally doubt Disney drop the mandatory trip.

 

[wdrl]

The IRS ruling will apply not only to the automatic 18% gratuity on Tables in Wonderland bills, but also whenever a restaurant automatically applies a gratuity to large parties. Since the IRS ruling states automatic "gratuities" must be treated as wages instead of tips, the employer is liable for payroll tax withholding on the automatic 'gratuity.'

Some restaurants are dropping automatic gratuities so they can avoid being liable for additional payroll taxes. If Disney doesn't change its stance on automatic gratuities, it will forced to pay millions more each year in employer taxes.

 

[Kidanifan08]

Based on this article, I would think they would opt drop the automatic tip. I actually kind of like it, since it simplifies closing out the bill.

DCL also has a built in up front gratuity payment; I wonder if that could be affected, too?

 

[erionm]

DCL also has a built in up front gratuity payment; I wonder if that could be affected, too?

DCL's ships are registered in the Bahamas and I believe are not subject to US payroll taxes or labor laws.

 

[Kidanifan08]

DCL's ships are registered in the Bahamas and I believe are not subject to US payroll taxes or labor laws.

Ahhhh ...... excellent point.

 

[OrangeCountyCommuter]

I read it and I'm shocked, shocked I say! I'm an income tax preparer and they're actually saying that some servers aren't fully reporting their tips. People lying about their income-say it ain't so! I see this as a way for the government to catch up with people and make it harder to cheat. I agree, it will be interesting to see if the automatic 18% gratuity is eliminated. DH always liked that it was there, but it may cause too much work in the future.

Years ago I had a friend who claimed he was an 'actor'. Of course he really was a waiter.

Every year he tried to convince me to let him claim all his acting lessons etc as business expenses. Every year I pointed out that telling the IRS you spent more then you make was an audit flag.

The gap between what he made and reported was HUGE.

 

[Simba's Mom]

Years ago I had a friend who claimed he was an 'actor'. Of course he really was a waiter.

Every year he tried to convince me to let him claim all his acting lessons etc as business expenses. Every year I pointed out that telling the IRS you spent more then you make was an audit flag.

The gap between what he made and reported was HUGE.

LOL-I have people who try to tell me the same thing-t's amazing how many people lose money at their business

 

[DenLo]

I expect most if not all employers (Dardanos won't be alone) will opt out of mandatory tips. They don't want to pay any more taxes including unemployment and Social Security and possibly local head taxes. All that additional accounting.

So I wouldn't be surprised if TIW changes too.

 

[luckyman_apd]

DCL's ships are registered in the Bahamas and I believe are not subject to US payroll taxes or labor laws.

Exactly. Most cruise ships near the US are based in the Bahamas. The only cruise ship I know (major cruise lines) is the NCL ship in Hawaii. Spirit of America. I'm curious to see what happens as well. We are usually 20% tippers but always pay the amount that's automatically included.....when its included. I kinda view the TiW auto tip as an extra 2% savings since without it, we'd leave 20%.

Disney has always printed suggested tips on their receipts for meals. Instead of automatically adding tips, maybe more restaurants will take disneys approach and instead of tacking it on and getting taxed, they will merely suggest and keep the responsibility of reporting on the server.

 

[bigtony777]

I never was a fan of the automatic gratuity. If there was terrible service, then you are stuck unless you speak to a manager and jump through three hoops of fire to get it changed. On the other end, if there was great service, I feel like I don't want to tip more because they expect the 18% before any service is provided.

I like it when I am with a large party and the server doesn't add the automatic gratuity. If they provide great service, then I give more than what the automatic would have been.

 

[Dean]

I don't see it as a big deal and if I understand the nuances correctly, it doesn't really seem much different. My understanding (assumptions) include that the employee is obligated to report tips, that the employer must withhold SS/etc based on what they know/what's reported and that the employer must pay their SS portion based on what's reported including tips & salary all subject to certain limits/variations. I'm not aware that the employer gets a break of their portion simply because it's a tip and not a salary (I may be wrong on this, those in the know can confirm or correct). Thus all we're really talking is that they're picking up a slightly larger % of previously unreported tips. The other issue is that it likely means those tips come out payday rather than day by day, likely better in the long run for most. As I understand it, the IRS rule has always been that a tip had to be voluntary and this should have been the way it was handled all along.

I never was a fan of the automatic gratuity. If there was terrible service, then you are stuck unless you speak to a manager and jump through three hoops of fire to get it changed. On the other end, if there was great service, I feel like I don't want to tip more because they expect the 18% before any service is provided.

I like it when I am with a large party and the server doesn't add the automatic gratuity. If they provide great service, then I give more than what the automatic would have been.

As I've said before, I despise the entire system because it simply shifts business costs to the customer in an end run manner. However, given that's the system, I'm torn on the automatic situations. For us, it likely means the server will either get the same or less since we're generally at or above 20%, I'd say I add additional tip maybe half the time depending on service. As it relates to Disney, the exception would be buffet's because I don't feel 18% is reasonable for buffet's, even Disney's. OTOH, I do think a lot of people don't tip or fail to tip reasonably where expected/reasonable. I've known of people who purposefully and consistently avoid tipping on cruises by routinely skipping the last dinner. How low is that?

 

[sweetdana]

I believe I would be more likely to get the TIW if it didn't include tips. I do not feel 18% at Chef Mickey is reasonable.. even a little. On a 115$ bill a tip of over 20$ is not reasonable to deliver a drink and remove 2 plates.


I feel using TIW for characters meals.. would appear to save 20%, but really is more like 10-15%..

I would normally tip about 10-12% so being required, at 18%, takes 7% ish off my savings.. so at a ton of places it is only 12% off..


I hope they throw in the towels, and skip guaranteed tips. Tips are suppose to be for people going above and beyond to get 18%, and if they are lousy sending 10% makes sense to me.. I use the DP a lot instead, but this trip I have cancelled nearly every ressie, but the TIW card working differently might have swayed me to do things differently.

 

[Cheshire Figment]

For Disney the auto-gratuity is included in the Union Contract. The current contract runs through September of 2014, and Disney is currently working with the Unions for a one year extension (until September 2015) to be able to clarify and set up the Health Insurance changes.

So there will be automatic tips at least until after the next Union Contract negotiations.

 

[DebbieB]

For Disney the auto-gratuity is included in the Union Contract. The current contract runs through September of 2014, and Disney is currently working with the Unions for a one year extension (until September 2015) to be able to clarify and set up the Health Insurance changes.

So there will be automatic tips at least until after the next Union Contract negotiations.

I think one reason for the automatic tip is people are supposed to tip on the non-discounted price but many don't know that. The automatic tip makes sure they are not shorted.

How did the unions feel about the tip being taken out of the dining plans? I'll bet they get shorted there.

 

[goofydad99]

I'm glad to read that I'm no the only one who feels that 18% is a ridiculous amount to tip on a buffet.

 

[ktate82]

I'm glad to read that I'm no the only one who feels that 18% is a ridiculous amount to tip on a buffet.

I agree with you as well. We had a dinner at CP once and saw our server three times....once when he took our drink orders (another server brought them and we didn't get any refills because he didn't come back) and again when he dropped off the check and brought my card back. Our meal was just over $100, and I did not feel he had "earned" $20 for that one hour. We were on the DDP, so we tipped as we felt the service deserved.

 

[luckyman_apd]

I do agree that I probably should not need to tip 20% for a buffet...however, I would like to know how those servers get paid. Do they rely on their tips for their salary? Or do they get paid more than a waiter/waitress rate? At a younger age, I worked as a server, and I lived on tips. As a kid (or an adult) no body really WANTS to pay taxes, so of course you didn't report everything. (Not here to discuss the morals of that). However, I also only earned $2.38 an hour (could be off as it was a long time ago, but it 2 something) where if I were a bus boy I would have made $6.50 an hour minimum wage at that time.

Now my beef would be with Disney if they get paid less (like a server) because they make tips. Truly a buffet server doesn't have nearly the responsibilities to the guests as another sit down restaurant. I guest this is good info to have so I know how to procede with tipping in the future. I never want to be cheap, but if I'm spending more than I need to, that's not cool either!

 

[Dean]

I do agree that I probably should not need to tip 20% for a buffet...however, I would like to know how those servers get paid. Do they rely on their tips for their salary? Or do they get paid more than a waiter/waitress rate? At a younger age, I worked as a server, and I lived on tips. As a kid (or an adult) no body really WANTS to pay taxes, so of course you didn't report everything. (Not here to discuss the morals of that). However, I also only earned $2.38 an hour (could be off as it was a long time ago, but it 2 something) where if I were a bus boy I would have made $6.50 an hour minimum wage at that time.

Now my beef would be with Disney if they get paid less (like a server) because they make tips. Truly a buffet server doesn't have nearly the responsibilities to the guests as another sit down restaurant. I guest this is good info to have so I know how to procede with tipping in the future. I never want to be cheap, but if I'm spending more than I need to, that's not cool either!

My understanding is they are in tipped positions but have more tables/customers than wait staff at sit down locations due to the nature of the buffet arrangement. That's the reason that the national tipping guidelines are more in the 10% range than the 18-20% for sit down's. It is my opinion that they do more than the usual buffet situation but less than if they were at a sit down. Therefore my judgement is that the proper neutral tip for very good to excellent service is 15%. IMO the difference is not worth arguing about for those automatic tip situations.