Question for Waitresses

Hopefully everyone will answer that they report 10i0% of their tips as income. Anything else is technically tax evasion. That said, I'm sure people report less. But just remember that the IRS has an algorithm that calculates how much you *should* be getting in tips and and if you're seriously under that you could be audited.

You need to talk to your employer. Your employer should be reporting your tips. He/she has to pay taxes on your tips, and you have to claim what your employer claims. You'll need to ask this question, although it should be on your W2.

ADDED: Illinois server minimum wage is $4.95

When I was a waitress (20 years ago) it was a preposterous random system. I just guessed at my tips and never had to pay taxes because my yearly earnings were still so low. I could barely afford to have my taxes filed, and some years I got refunds. All you can do is keep track or estimate as far as I know...And as for Everly HOPING you report 100%....has she ever waited tables? Waiters rarely make enough income to even pay taxes unless they work in an extremely expensive and busy restaurant. It's the people with posh corporate jobs that evade their taxes the most.

My college student daughter is a server in California. At her restaurant they claim 18% of their total food sales daily. Some times she hits that sometimes she doesn't but she also tracks it and it really evens out. Out of her tips she also tips out to the cooks, bar and busboy but this doesn't decrease the amount she claims.

30 years ago when I was in college I claimed 15% of my food sales daily.

Seriously, anyone that is saying to report 100% tips has NOT waited tables for a living. I did this throughout college and graduate school. Most places did not even ask me what my tips were and I guess just estimated for me based on sales. I did have one place that had us enter tips into a computer system. The standard convention was that everyone claimed 8% of their sales. Why would you automatically claim 15% of your sales? There are times that would have made you paying taxes on money that you did not make. I used to avoid selling gift cards too. Obviously, folks do not tip on the price of a gift card, but that would still be added to your sales at the end of the night.

i waitressed most of my life, and i kept track (why don't you???) and reported what i earned.
tracy M, you are absolutely incorrect. there are honest people out there. i'm not the only one i worked with who reported accurately.
khairete
S.

When I was a server we had to claim no less then 10% (this was back in the 90's). The pay rate for servers in the US is about $2.12 an hour and I don't think that has changed. Servers rely on tips and the pay check goes toward taxes. If you don't claim enough you will have to pay when filing your taxes and if you are using a computer cash register (which I think all restaurants have now) then it will keep tract of ALL your sales and what you should be claiming.

If your customers are paying by credit card, the restaurant where you work knows how much you are getting in tips, and they will report it to the IRS. So yes, you should keep track. Even if most of your customers do not pay by credit card, restaurants know the average tip for their business and will do the calculation and report it. So, for example, if you serve 10 tables, and each check is $50, the restaurant knows you did $500 worth of business, and they will report to the IRS that you made $75 in tips that night (15% of $500). Depending on the restaurant, they may use a higher or lower percentage (eg, when I worked at a pizza place near the college (college kids are poor tippers), they reported 12%). The tip amount for the year should show up on your W2 that you receive in January.

I waited tables all through college, and every place I worked reported the tips for me - and they took the taxes on those tips right out of those very low wages, so my paychecks were usually literally nothing.

ADDED: I would suggest that when your employer asks for your tickets at the end of the night, they are not only using that to make sure the numbers work out, they are also using that number to calculate your sales, and to approximate your tips based on both your sales and the credit card receipts. You should ask what percentage they are reporting for non-credit card sales.

Legally...100%. I think we used to claim 10% but had to do so every night as we closed out. Seems odd that you don't. Also know that you have to cover all of your credit card tips becuse there is record of them.

As a general rule it's 10 percent of your total sales.

I've never understood this law since a tip is not something someone has to leave.

Your employer should require you to report your tips at the end of each shift, otherwise how could they possibly know how much tax to take out of your paycheck? Your low hourly wage is basically a way for you to pay taxes on the money you earn, i.e. your tips. You should see these taxes taken out on each one of your pay stubs.

That said, the restaurant business is fraught with tax evasion. It is not uncommon for waitresses (or any employee) to work "under the table", in fact in many places this is par for the course. However, this does not release you from the responsibility of paying taxes on your earnings. IF you are being paid under the table, you are required to keep track of your earnings and report them on a 1099 form come tax time. You can report it as work you did as an independent contractor.

My husband and I do this for side jobs we have, and technically your boss should be reporting the pay to you on a similar form, but ours never have. We've covered ourselves by reporting it this way and paying our taxes on it, what the bosses do about it doesn't affect us. If you are not having taxes taken out of your paycheck, keep track of your income (I just do it in a basic ledger book) and report it on your income tax return next year. You will have to pay taxes on it, but if you are getting a refund, they will simply take the taxes out of that.

Legally, we say you must report 100% of your tips. In reality, most people only report 10% of their total sales. All of your credit card tips are automatically reported. Usually most systems allow you to claim tips when you clock out. I always claimed all of my tips because I wanted to establish income. You don't want your W-2 to say you made nothing at the end of the year.

Also, YOU should be making sure the numbers match up before checking out with your employer. Don't trust that he/she is doing this for you. If you don't checkout and then there is a discrepancy, you are responsible. I have also seen several of my bartender friends be audited over the years.

When you turn in your tickets, management computes how much you made in tips based on the dollar amount of the tables you served. You will need to claim that amount on your taxes.

And where do waitresses make 2.12 per hour? Isn't there a federal minimum wage that they must be paid? I know at the Starbucks here, as well as Giant Burgers, the staff make $8.00+ per hour. At the larger, nicer restaurants, they make much more than that, plus tips. If waitresses where you live make $2.12 per hour, they should all MOVE. You can make more than that on welfare in California!