mytripsandraces
DIS Veteran
- Joined
- Mar 29, 2010
- Messages
- 2,249
While true, that is just what they must "claim", legally they are suppose to report ALL the tips not just 8 percent.
I didn't express myself well. I was only referencing the taxes deducted from the server's paycheck. I meant that the taxes were taken out of their paychecks based on the actual tips charged to the credit card and, for bills with no tip marked (because it was paid in cash), the taxes on 8% of the bill are removed from the paycheck (as if the customer had tipped 8%). Of course, the server is required to claim all tips received as income on their annual tax returns.