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(TaxProf)   30 year old's last wish: "leave an awesome tip (and I don't mean 25%. I mean $500 on a f***ing pizza) for a waiter or waitress." Of course, the IRS wants its slice   (taxprof.typepad.com) divider line 137
    More: Interesting, The Last Wish, Aaron Collins, Weekend Edition Sunday  
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13698 clicks; posted to Main » on 07 Jul 2013 at 12:44 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-07-07 04:37:43 PM  

serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?


FEDERAL TIP CREDIT DOES NOT WORK THAT WAY.

/everyone makes at least minimum wage
//or their employer is breaking federal law
///and has to pay the back wages plus legal fees if they get called out on it
 
2013-07-07 04:38:09 PM  

BetterMetalSnake: I don't quite understand the hate for the IRS. I get it, they force you to pay your taxes. They exsist because they collect money on our behalf and for our use. Too many cretins act like the IRS keeps the money for hookers and blackjack.

Just an observation. How strong is the correlation between people that biatch about the IRS and people that biatch about potholes, long lines at the DMV, and vigorously salute our soldiers, police and firefighters?


the point is.  if they DIDNT use the money on hookers and blackjack there would be an uprising
 
2013-07-07 04:39:35 PM  

ElLoco: cameroncrazy1984: serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?

Yep. Sorry, but that's the way it is. As I said, tax law doesn't have a sentimentality clause. If I win $500 on craps the day I go to the casino with my dying aunt, do I get a free pass too?

You really need to pay people who know what they're doing to do your taxes. You haven't a clue, and this makes twice in one thread that you've been wrong.


Speaking of not havin a clue, you realize those W2G instructions you linked in the other post are for those who PAY the winnings, not those who receive them? A W2-anything filed by a taxpayer has no way for the taxpayer to fill in the amount. If you win $10 playing slots, it's reportable to the IRS. Whether you choose to report it is up to you, since it is below the limit imposed on the casino.
 
2013-07-07 04:47:40 PM  

ZAZ: If one of my waitresses gets a $500 tip I make sure to report it to the IRS as a tip. The IRS assumes that restaurants with low tip receipts are cheating on taxes.


How would you know? No waiter or waitress I've ever known has ever accurately reported to their supervisors how much they actually made in tips. Ever.  To each other? Yeah, we'd let each other know when we got bit tips, but our bosses? Nope.
 
2013-07-07 04:53:56 PM  
Oh, I see; never mind. Viral video.

Stupid.
 
2013-07-07 04:56:20 PM  

BetterMetalSnake: I don't quite understand the hate for the IRS.


You don't understand the mentality that says, "I want things for free?" I mean, you may not agree with it, sure, but not understand it?

Everyone wants something something for nothing.
 
2013-07-07 04:57:27 PM  
ghare:   He goes, "if I sell it, I'd get a million, but instead I will only get 700,000 because of taxes, hence I don't want to sell".  What the fark?! Your other companies are going under because you don't have capital, and yet you're irrationally biatching about taxes?  Idiot.

He's a double idiot. Cap gains aren't taxed at 30%

Yes.  True.  Although its a C corp, so he gets dinged as well as the shareholder on profits realized.  Double tax.  Maybe that's why he's biatching.
 
2013-07-07 05:07:38 PM  

SirEattonHogg: ghare:   He goes, "if I sell it, I'd get a million, but instead I will only get 700,000 because of taxes, hence I don't want to sell".  What the fark?! Your other companies are going under because you don't have capital, and yet you're irrationally biatching about taxes?  Idiot.

He's a double idiot. Cap gains aren't taxed at 30%

Yes.  True.  Although its a C corp, so he gets dinged as well as the shareholder on profits realized.  Double tax.  Maybe that's why he's biatching.


Is he selling off a C corp in a share transfer? Then the only impact is capital gains for the shareholder. He also is likely to have some assets in a loss position to decrease any gains.

Is he selling off assets within the C corp? If what you say is true there are likely plenty of losses to eat up gains within the company and any amount reinvested and/or used to pay off debt have no tax tax implications, only money pulled as dividends (which can be spread out over time to minimize taxes) is taxable.
 
2013-07-07 05:24:49 PM  

Speaker2Animals: ElLoco: cameroncrazy1984: serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?

Yep. Sorry, but that's the way it is. As I said, tax law doesn't have a sentimentality clause. If I win $500 on craps the day I go to the casino with my dying aunt, do I get a free pass too?

You really need to pay people who know what they're doing to do your taxes. You haven't a clue, and this makes twice in one thread that you've been wrong.

Speaking of not havin a clue, you realize those W2G instructions you linked in the other post are for those who PAY the winnings, not those who receive them? A W2-anything filed by a taxpayer has no way for the taxpayer to fill in the amount. If you win $10 playing slots, it's reportable to the IRS. Whether you choose to report it is up to you, since it is below the limit imposed on the casino.


That person asked if he/she got a free pass. I showed them the free pass. If a casino doesn't issue a W-2G because it's below the federally mandated $600 reporting level, then whether they choose to use the pass is up to them.

On a semi-related note that your reply reminded me of... ever wonder how many people harp on other people not reporting every penny of every dollar that touches their hands, and yet don't have a Use license for reporting sales tax on internet purchases? That came up recently in a very similar conversation. Basically: Person 1- Report everything, no exceptions. Yada yada, same as above, etc. Tattle on people. Doing otherwise is cheating the government and those that benefit from their programs. Person 2 -  Really? Did you pay your state taxes on that $1500 laptop you ordered from Newegg last month? Person 1 -  Nope. Don't have to. It was out of state. The rest of us - ...
 
2013-07-07 05:31:17 PM  

Crinklepouch: Sleeping Monkey: Most servers report credit card tips or 8%, whichever is most. If someone gives a cash tip of $500, the IRS should never know about it.

Agreed! I was a pizza delivery driver...Also, this is my Weeners,


I saw that movie! Those poor college girls ordered that pizza and then realized they were broke and needed a way to pay for it!

/Welcome to Fark
//Welcome to the Fark filter
 
2013-07-07 05:41:23 PM  

ElLoco: On a semi-related note that your reply reminded me of... ever wonder how many people harp on other people not reporting every penny of every dollar that touches their hands, and yet don't have a Use license for reporting sales tax on internet purchases?


Everyone I've talked to around here pays use taxes on Internet purchases. Most Internet purchases to New York have the sales tax collected by the seller, and on top of that, the income tax form assumes that you bought $500 of untaxed goods from the Internet. Sure, you could choose to override the default number, but the form is very stern in warning you that you should not put "-0-" on the use tax line. Everyone I know is either too lazy to keep years' worth of receipts to prove that they owe less tax or too afraid of getting audited, so they pay the extra to be safe.
 
2013-07-07 05:42:01 PM  

serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?


Do those people not use roads and social services? At the end of the year their tax bill is going to be very low. Commensurate with their income, shockingly. Everyone needs to pay their fair share. Just because you wait tables does not mean the rest of us should foot your tax bill.
 
2013-07-07 05:44:14 PM  

Yes please: Everyone should always tip at least 2200% unless the service was particularly wretched.  Only cheapskates tip 15% any more.


2200%? Jesus, you're such a dick. You should be tipping 3000% even if the server pisses in your glass while standing at the table.
 
2013-07-07 05:51:31 PM  

Starry Heavens: ElLoco: On a semi-related note that your reply reminded me of... ever wonder how many people harp on other people not reporting every penny of every dollar that touches their hands, and yet don't have a Use license for reporting sales tax on internet purchases?

Everyone I've talked to around here pays use taxes on Internet purchases. Most Internet purchases to New York have the sales tax collected by the seller, and on top of that, the income tax form assumes that you bought $500 of untaxed goods from the Internet. Sure, you could choose to override the default number, but the form is very stern in warning you that you should not put "-0-" on the use tax line. Everyone I know is either too lazy to keep years' worth of receipts to prove that they owe less tax or too afraid of getting audited, so they pay the extra to be safe.


We have no state income tax in Texas, so there are no forms to be filled out. Paying any use tax at all is on the honor system, but it is technically required. I have Sales and Use permits for other reasons, but I do report internet purchases and pay state tax on them. Honestly, the tax liability just isn't very much. In-state sales taxes typically run in the 8-8.5% range.
 
2013-07-07 06:01:23 PM  

dywed88: FourPetesake: The restaurant I work in automatically taxes servers on a percentage of their sales (percentage varies based on location).  A server who consistently gets 25%+  tips gets taxed on much less, and a server who makes a lower percentage may be taxed on  more than they are actually making.  So if someone handed me $500, I'm not obligated to report anything, I get taxed on what the customer spends.


I don't think you understand how the tax system works. What your employer withholds is irrelevant to your tax liability and what income is to be reported. It is simply an advance payment. You are required by law to report any tips. If the tax is less than was withheld, you get a refund, if it is more you pay the difference. Now, you may make the decision to break the law on the assumption that you will not get caught, but you are still legally obligated to report it.


We don't declare our own tips.  The management declares them for us based on each server's sales for the week.  Let's say I ring $1000 worth of sales in a week, they automatically report 15% or so.  In my paycheck, I am taxed by the government on my $5/hr base pay plus that $150 in tips.  The server has no involvement in reporting tips at all.
 
2013-07-07 06:09:10 PM  

ElLoco: We have no state income tax in Texas, so there are no forms to be filled out.


Who say what now. And here I thought it was really surprising that the town I currently live in doesn't collect income tax! Although, I guess I had heard that Alaska *pays* its residents, so perhaps I shouldn't be so surprised.

FourPetesake: We don't declare our own tips.


You should. Your company is reporting their best estimate of your tips, and pre-collecting the tax on that for you. At the end of the year when you file your income tax forms, you are legally required to report to the best of YOUR knowledge what you made, not the best of your COMPANY'S knowledge. If you are lucky, then what your company collects for you will be sufficient to avoid late-penalties on not having submitted your income tax quarterly. If not, well, it hurts -- I know from experience that it does -- but at least you'll know better for the next year.
 
2013-07-07 06:12:10 PM  

Starry Heavens: ElLoco: We have no state income tax in Texas, so there are no forms to be filled out.

Who say what now. And here I thought it was really surprising that the town I currently live in doesn't collect income tax! Although, I guess I had heard that Alaska *pays* its residents, so perhaps I shouldn't be so surprised.

FourPetesake: We don't declare our own tips.

You should. Your company is reporting their best estimate of your tips, and pre-collecting the tax on that for you. At the end of the year when you file your income tax forms, you are legally required to report to the best of YOUR knowledge what you made, not the best of your COMPANY'S knowledge. If you are lucky, then what your company collects for you will be sufficient to avoid late-penalties on not having submitted your income tax quarterly. If not, well, it hurts -- I know from experience that it does -- but at least you'll know better for the next year.


I appreciate the advice, but as an experienced server in a crappy restaurant, I make a pretty high percentage on my tips so what is declared is always less than what I'm bringing home.  Anyway, I'm outta there in 2 more weeks!!!
 
2013-07-07 06:12:18 PM  

serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?


On the other hand, if the restaurant reports tips below what the IRS rolls the dice, drinks alcohol, and plays with a nostril hair before spinning a wheel to determine the average.  The audit gets nutty.  Generally resulting in 8 months of yelling back and forth before the IRS finally admits that the restaurant did not have more tips than they reported.
 
2013-07-07 06:12:52 PM  

Jument: Yes please: Everyone should always tip at least 2200% unless the service was particularly wretched.  Only cheapskates tip 15% any more.

2200%? Jesus, you're such a dick. You should be tipping 3000% even if the server pisses in your glass while standing at the table.


2200% where do u live NYC?
 
2013-07-07 06:18:19 PM  
I dont care.  Odds of that waitress or waiter already scamming on reported tips=100%
 
2013-07-07 06:25:01 PM  

FourPetesake: I appreciate the advice, but as an experienced server in a crappy restaurant, I make a pretty high percentage on my tips so what is declared is always less than what I'm bringing home.


That being the case, it is still true that the taxes you owe are based on what you make, not what your company says you make.

FourPetesake: Anyway, I'm outta there in 2 more weeks!!!


At least you'll only have to worry about being audited for six and a half more years, then.
 
2013-07-07 06:27:51 PM  

ElLoco: That person asked if he/she got a free pass. I showed them the free pass. If a casino doesn't issue a W-2G because it's below the federally mandated $600 reporting level, then whether they choose to use the pass is up to them.


Well no. It's not a free pass if you still have to pay. Regardless of whether the casino issues a W2-G, it is still taxable income from the very first penny.
 
2013-07-07 06:32:21 PM  

ElLoco: That person asked if he/she got a free pass. I showed them the free pass. If a casino doesn't issue a W-2G because it's below the federally mandated $600 reporting level, then whether they choose to use the pass is up to them.


Choosing to commit tax evasion is not the government giving you a "free pass"

FourPetesake: We don't declare our own tips.  The management declares them for us based on each server's sales for the week.  Let's say I ring $1000 worth of sales in a week, they automatically report 15% or so.  In my paycheck, I am taxed by the government on my $5/hr base pay plus that $150 in tips.  The server has no involvement in reporting tips at all.


It doesn't matter. If your W-2 has $1000 worth of tips on it, but you received $1500 you are required to self-report the actual amount and pay the appropriate taxes. The employer's estimate is for withholding purposes, to protect them from under-withholding penalties and protect you from estimated tax penalties. Not reporting tips in excess of those on your W-2 is making the choice to evade taxes on the basis that you won't be caught.
 
2013-07-07 07:13:56 PM  

serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?


It's not about choosing the IRS. Since the US has chosen to pay servers below minimum wage, reported tips + wage must equal the local minimum wage or the employer makes up the difference. And tips are income regardless. You don't legally differentiate between "I left you a big tip because the neighbor lady finally gave me a handy" and "I left you a big tip because it was someone's dying wish".
 
2013-07-07 07:20:20 PM  

BetterMetalSnake: I don't quite understand the hate for the IRS. I get it, they force you to pay your taxes. They exsist because they collect money on our behalf and for our use. Too many cretins act like the IRS keeps the money for hookers and blackjack.

Just an observation. How strong is the correlation between people that biatch about the IRS and people that biatch about potholes, long lines at the DMV, and vigorously salute our soldiers, police and firefighters?


Viscerally the hate for the IRS makes sense. Periodically you have to do a bunch of simple but annoying math that at the end of the day you hope results in not seeing a big red number.

That said. I think it's hilarious that the lack wits who endlessly compare government spending to household spending are the same lack wits who typically scream about abolishing taxes or reducing tax rates.

"I can't pay my bills. As a fiscally responsible person who understands the need to maintain a budget, I will go to my boss tomorrow and ask for a paycut, thereby forcing me to be more responsible and giving him more money to give to me down the line" said nobody ever.
 
2013-07-07 09:31:48 PM  
Of course, subby is an insufferable Teabagger complaining about the low tax rates this country has enjoyed for decades.
 
2013-07-07 11:23:23 PM  

Two Dogs Farking: Pithy comments:
1) something something death and taxes something.
2) There's no such thing as a free lunch, even if you're waiting tables at a pizza parlor

Serious comment:
If tip income wasn't such a huge share of total earnings, the IRS might be able to ignore it, but since it is, it would be granting an unfair advantage to a certain group of workers. Full-time wait staff are generally paid a living wage in Germany, for example, and tips are seldom more than 10% (and usually much less, like rounding up to the next euro and then adding a euro or two, depending on the amount of the bill). Tips are tax-free in Germany.


Same in the Netherlands (indeed, most EU countries) because they just farking pay the waitstaff. You also know how much your meal costs in the Netherlands because the prices on the menu include tax.
 
2013-07-08 01:25:13 AM  
Well yeah. It also wasn't like it was his money. It's a great gesture and I think pretty farking cool, but it's money being given out... you have to pay taxes if you win the lottery or a boat or anything.It's part of society.
 
2013-07-08 01:27:50 AM  

Rik01: Sometime back in the 70s, I used to deliver news papers as a second job and the income was not taxed. Having a motor route (meaning, I mainly stayed in my car) I had a small gas allowance but the miles full of turns, lots of braking, the weight of several hundred papers caused a lot of wear and tear. I was forever tearing up front tires and having to replace brakes.

Then President Reagan pushed through a tax bill requiring paper carriers to file tax forms on their income. We managed to get around that by deducting everything from the cost of plastic paper bags, declaring our second cars for business use only, and even the tip cards we sent out on Christmas were considered advertising and deductible -- so long as we had the papers name included somewhere.

Plus, many customers would mail us a tip in cash. Which most paper carriers would fail to declare. Checks left a paper trail. Cash didn't.

If you're going to give the waiter or waitress a $500 tip, do it in cash. Don't make a publicity stunt over it. Most waiters do not report the majority of their cash tips anyhow, since there is no paper trail. Tips via credit card or check, however, leave a trail.

These days, with the debt so high thanks to the unmitigated greed of banks and the 1% during the housing boom, new taxes are popping up almost daily. I keep waiting for the homeless to start being taxed on the money they make panhandling, selling recyclables or doing the occasional low pay odd job.

I think it's great that so many people are contributing to the fund in the name of this guy, but so long as the fund is listed in his name and indicates what it's for, the IRS will watch the withdrawals.

Even if the executor puts the fund under a different name to protect the waiters and waitresses, the IRS will track him down through the information he gave to set up the fund, do an audit and demand he pay taxes on the monies collected.
It's kind of like our lotteries. Most were set up to benefit the schools with their ...


CSB.

Why wouldn't that income be taxable?
 
2013-07-08 02:04:56 AM  

serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?


Always assume the government is watching.
 
2013-07-08 04:29:38 AM  

NaziKamikaze: serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?


To be fair, servers generally get healthy tips and don't report a good chunk of it, so end up getting paid more than someone who gets paid a decent salary/hourly wage. I think this what people take issue with the most./Had a coworker that got one of these $500 tips


The trade off is, they get zero benefits and no job security, so everybody can just calm the fark down about servers and bartenders reporting the odd cash tip.

Also, anyone using the phrase "minimum wage" with regard to service jobs has already shown themselves to be an idiot. Waiters and bartenders make more than minimum wage because people don't want to be waited on by the kind of people who would work for that little.

If restaurant jobs all went to minimum wage tomorrow, every single one of you Mr. Pink motherfarkers would be whining your infantile little heads off about quality of service after your first trip to the Olive Garden, or wherever the fark it is you go to stuff breadsticks and soda into your gaping cakeholes.
 
2013-07-08 04:57:13 AM  

BetterMetalSnake: I don't quite understand the hate for the IRS. I get it, they force you to pay your taxes. They exsist because they collect money on our behalf and for our use. Too many cretins act like the IRS keeps the money for hookers and blackjack.

Just an observation. How strong is the correlation between people that biatch about the IRS and people that biatch about potholes, long lines at the DMV, and vigorously salute our soldiers, police and firefighters?


I'd say the correlation is more those of us who worked before 2000. Of all the things W did, the one unequivocally good thing was him telling the IRS to stop being assholes.
 
2013-07-08 07:17:12 AM  

serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?


Negotiate for better terms, or realize you are human offal worth little more than 2 bucks.
 
2013-07-08 11:27:04 AM  

Yogimus: serpent_sky: I know it is fun to be contrary on Fark, but are people really choosing the IRS over servers who make farking $2.00 an hour and live off what are often paltry tips? Seriously?

Negotiate for better terms, or realize you are human offal worth little more than 2 bucks.


When I was a waiter, I took home the equivalent of 75K-80/year pre-tax, working 35 hours/week.

Of course, I was working at a place you probably couldn't afford to eat. But if you had managed to save up your paltry wages for a few months and tried to impress your girlfriend by bringing her in, I'd still have been nice to you, out of the kindness of my heart.
 
2013-07-08 11:34:38 AM  

Z-clipped: The trade off is, they get zero benefits and no job security, so everybody can just calm the fark down about servers and bartenders reporting the odd cash tip.

Also, anyone using the phrase "minimum wage" with regard to service jobs has already shown themselves to be an idiot. Waiters and bartenders make more than minimum wage because people don't want to be waited on by the kind of people who would work for that little.


So including tips, waiters and waitresses make more than $15k a year? That is really good to hear. If that's the case, then they can pay their taxes just like everyone else I know who makes $10k-$20k a year. Why should I not be upset when they try to bring down this country by refusing to do so?
 
2013-07-08 11:59:35 AM  

Starry Heavens: Z-clipped: The trade off is, they get zero benefits and no job security, so everybody can just calm the fark down about servers and bartenders reporting the odd cash tip.

Also, anyone using the phrase "minimum wage" with regard to service jobs has already shown themselves to be an idiot. Waiters and bartenders make more than minimum wage because people don't want to be waited on by the kind of people who would work for that little.

So including tips, waiters and waitresses make more than $15k a year? That is really good to hear. If that's the case, then they can pay their taxes just like everyone else I know who makes $10k-$20k a year. Why should I not be upset when they try to bring down this country by refusing to do so?


Oh please... "bring down the country"? Don't be histrionic. Under-reporting your income by 10% (which is about all servers can get away with these days, since hardly anyone uses cash anymore) isn't the same as not paying any taxes, and it's a drop in the bucket compared to the evasion committed by really wealthy people. You're mad because a waiter is paying 23.5% instead of 25% on 25K, while Mitt Romney pays 13% on 20 million? Have a little farking perspective.
 
2013-07-08 02:37:28 PM  
Z-clipped: Under-reporting your income by 10% (which is about all servers can get away with these days, since hardly anyone uses cash anymore) isn't the same as not paying any taxes, and it's a drop in the bucket compared to the evasion committed by really wealthy people. You're mad because a waiter is paying 23.5% instead of 25% on 25K, while Mitt Romney pays 13% on 20 million? Have a little farking perspective.

I almost always tip in cash -- and unless the service is exceptionally bad, way more than 15%.
 
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