IRS mandate changes rules regarding tips
Wed, 26 Mar 2014 03:36:31 GMT —
The newest Internal Revenue Service (IRS) mandate will put a burden on servers who depend solely on tips to pay their bills.
In 2013 Kat Radicke said she made about $18,000, she paid $6,400 in taxes and received a $900 refund from the government.
A full-time student, a part-time athlete and a server at Chile's working double shifts on weekends just to keep up.
"There have been times where a check has been 48 bucks and they've given me a $50 bill," Radicke said â??They said, 'Keep the change, you were a great server,' and I just wanted to take those $2 and shove it in their face and say, 'You need it more than I do obviously.'"
The rule states restaurant owners can no longer mandate tips from groups of more than six unless they treat those tips as service charges. Meaning the tip goes to the restaurant instead of directly into the server's hands.
Darla Frey, owner of Ye Olde Pancake Station, said she's never required a group to pay an automatic tip and she doesn't plan on it, but she understands the thinking behind it.
"The government feels like once that automatic tip is put on that ticket it becomes an automatic sales item, which should be sales taxed," Frey said.
Radicke said Chile's gives servers the choice to add automatic tips for large groups. She said unfortunately not all restaurants do, and that customers should keep one thing in mind.
"Some have brand new babies," Radicke said. "Some of them are putting themselves through school so they don't have to be here forever."