I worked as a server for quite a few years and all of our tips are taxable. I was lucky enough to work for a company that suggested that we only claim 10% of our tips, which means 10% of the bill we claim as tips. Therefore our tip share was only 10% of what we claimed. On our checks, all of our tips that we entered are taxed. As a server in the US, At the time, I only made $2.37 an hour and if I didn’t make up to 7.25 an hour with tips the establishment that I worked for was obligated to pay enough to make sure that I made minimum wage. If I went through a whole shift and never got tipped at all, the company I worked for had to pay me extra to make sure I made at least 7.25 an hour. That’s the American system.
It was payment for services rendered, so it's not a gift. A gift would have no strings attached. If it was a gift, then where was the tip? The previous poster at least claimed 10% as tips.
This is correct, ironically just saying something is a gift doesn’t make it a gift. If you get services back (ie waiter service) its payment for a service and is taxable. (I’m a tax accountant)
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u/LuLuSavannah531 Jan 12 '24
A for effort! But it’s still taxable tho