"zuuum" > wrote in message
...
>
> "Peter Aitken" > wrote in message
> m...
> > "zuuum" > wrote in message
> > ...
> >>
> >> "notbob" > wrote in message
> >> news:4t41d.180830$Fg5.104797@attbi_s53...
> >> > On 2004-09-12, jmcquown > wrote:
> >> >
> >> >> Indeed, they tax your sales not what you *earn* which is just plain
> >> >> stupid.
> >> >> Sometimes I had to pay more money than I made. Nother reason not to
> >> >> be
> > a
> >> >> wait-person.
> >> >
> >> > HUH!!??
> >> >
> >> > How can they tax your sales? A wait person is not selling anything?
> >> > Please
> >> > elaborate.
> >> >
> >> > nb
> >>
> >> The Feds adopted a policy of assuming unreported tips long ago, so now
> > they
> >> tax servers, whether they made the assumed percentage of tips or not.
> >>
> >
> > This is plain and simply false. I have looked into this at length and
the
> > tax code is quite clear. All a wait has to do is detail their actual
tips
> > and pay tax on that amount. A percentage *may* be assumed if the wait
does
> > not itemize tips in the proper fashion. This is an urban legend that is
> > kept
> > alive by waits who who want customers to feel guilty for leaving no tip
or
> > a
> > small tip when they get shitty service.
> >
> >
> > --
> > Peter Aitken
>
> It is a stubborn legend, then. Any links to exactly what is legal for the
> server's employer to withold? Perhaps it is witholdings rather than
actual
> taxes due.
>
>

It's called "allocated tips." If you wait tables and do not report your
actual tips to your employer they are required by law to "allocate" tip
income to you. You then pay SS and FICA taxes plus income taxes on that
amount. If you actually keep track of your tip income and can *prove* you
made less than 8% of your sales in tips then you won't have allocated tips.

Kathy