Printable View
What do you all think about this proposal? I guess I really don't understand why waitstaff in particular should get much, if not most, of their income exempted from taxes. If it really will just apply to cash tips, I think I would be disinclined to ever tip in cash going forward.
Yeah, I hadn't really thought about it, but it's true that many workers won't have to pay any Federal taxes in that case. I have one son who is a career server and he gets less than $3.00 an hour. So, to your point, when he files, without the tips, he probably won't have to pay any taxes at all.
Of course, I'm happy to see him getting more in his pocket. He lives very simply on a low income.
I think this little gimmee in the BBBB was a political gesture--a nod to the working class that costs the government very little. That's all. Hey, look at this--no tax on tips for the little people! A sleight of hand to take your attention off the massiver tax cuts at the other end of the spectrum.
Keep giving tips in cash until this thing rolls out. Just as an aside, many restaurants pool tips. So if you think your server did a fantasstic job and you give more than usual, know that the generous tip will get diluted at the end of the night when tips are split up. Best thing you can do is write a note on the merchant receipt, and if it's digital, find another way to let the manager know.
Did they really say just on cash? What about those that tip via card?
TMS: I definitely read this somewhere because it struck me as strange, but I can't even recall where, so do not take it as gospel.Quote:
Originally Posted by ToomuchStuff
I'm not understanding... There will be no tax on cash tips? Here is what one source said (NBC News)Quote:
Originally Posted by rosarugosa
"In a surprise move, the Republican-led Senate quickly passed the No Tax on Tips Act on Tuesday, giving its official stamp of approval to an idea that has gained traction since President Donald Trump campaigned on it last year.
"The legislation would create a tax deduction worth up to $25,000 for tips, limited to cash tips that workers report to employers for withholding purposes on payroll taxes. The tax break would also be restricted to employees who earn $160,000 or less in 2025, an amount that will rise with inflation in coming years."
So, rosa, why would that make you disinclined to pay tips in cash?
Based only on the above, the tips must be reported to the employer, thus subject to social security (FICA) and any other items, and the employee must file a tax return to get a "deduction". The regulations are going to be interesting.
I am always suspicious of the reporting of such things since one word or an interpretation can cause the whole thing to crash. As a retired IRS employee, I can already see many ways to work the system to gain an unintended advantage.
A bit more info can be found here: https://www.msn.com/en-us/news/polit...ll/ar-AA1FenrX
I guess based on the bolded, I took this to mean tips via cash as opposed to by credit card. Perhaps I am taking it too literally?Quote:
Originally Posted by catherine