The No Tax On Tips Act

[Doctor Phibes]

Here's the President getting a 15% tip. Obviously, he doesn't pay much income tax anyway so it won't affect him.

[LuFins Dad]

The ridiculous part? Most tips go unreported anyway…

[LuFins Dad]

Luke’s going back to work at Benihanas for the early part of the summer and is planning on switching or working another serving job while finishing his 1 year nursing intensive. (Benihanas is very seasonally dependent, June and December are huge months, the others aren’t as busy and he can make more at a high end steak place like Capitol Grill or Bourbon Blvd). He will likely be making a lot more than $25K in tips…

I wonder how this works in actuality… Is the $25K counted as the first $25K in income? Then, every penny above that they earn would be starting at 12%…

[jon-nyc]

My guess is the W-2 will contain a tip line item which will just be excused from AGI calculations (up to 25k) and taxes work the same on remaining income.

[jon-nyc]

@Doctor-Phibes said in The No Tax On Tips Act:

Here's the President getting a 15% tip.

Tip? Shit, he’s getting the whole thing.

[LuFins Dad]

Hmm, this actually opens up a shit ton of confusion for Karla’s business. Most of the service providers are 1099NECs. A fair amount of their income is tip income, but the 1099NEC has no line item for tips. It’s all compensation… Karla’s scheduled to take over ownership next year, and will need to deal with this This will have a pretty big and weird effect on 1099 gig and service providers. All those UBER, LYFT, and Door Dash drivers are facing the same thing.

[LuFins Dad]

But it’s nice that Strippers will be reporting $25K more in income…

[jon-nyc]

I would imagine the IRS will introduce a line item for qualifying tip income on 1099 and W-2 forms.

[LuFins Dad]

@jon-nyc said in The No Tax On Tips Act:

I would imagine the IRS will introduce a line item for qualifying tip income on 1099 and W-2 forms.

It’s still going to be difficult. The law is written that it has to be jobs that traditionally received tips prior to 2023. How do you prove that when official tax documentation didn’t show tip income? It’s a growing concern for the gig economy anyway since pro-labor Departments of Labor have been going after gig work in general, and this Department of Labor is as pro-labor as any in the last 40 years…

[89th]

@jon-nyc said in The No Tax On Tips Act:

@Doctor-Phibes said in The No Tax On Tips Act:

Here's the President getting a 15% tip.

Tip? Shit, he’s getting the whole thing.

In mother russia, waiter tips YOU!

[taiwan_girl]

@jon-nyc said in The No Tax On Tips Act:

My silent protest will be to lower my normal tip rate to 15%.

Yup, and i know in some US states/cities, waiters are required to receive minimum wage.

I will never understand tipping where is becomes an expectation and not a reward as it was (I think) intended.

[jon-nyc]

I’m getting really tired of tipping while standing at a counter. Maybe if I ordered some fancy dessert drink involving the barista but not when they pour me a cup of drip.

[LuFins Dad]

@jon-nyc said in The No Tax On Tips Act:

I’m getting really tired of tipping while standing at a counter. Maybe if I ordered some fancy dessert drink involving the barista but not when they pour me a cup of drip.

The general idea of tipping at that type of situation was pocket change… You buy a cup of coffee, it came to $2.83 with tax. Rather than walk around with another dime, nickel, and a couple of pennies, you can drop it into the jar… Now they expect the same tip that you would get for a high-end sit down restaurant.

[jon-nyc]

Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.

[LuFins Dad]

@jon-nyc said in The No Tax On Tips Act:

Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.

I tipped 15% at our hotel breakfast buffet over the weekend. They are still cleaning up after me, and generally were also prepping the food and getting it to the buffet.

How do you treat ToGo?

[jon-nyc]

I tipped 10. If the price had been more reasonable I might have tipped more.

Stand up it depends. It’s usually easier to hit the smallest preset option than customize and there usually not that much money involved. At a counter I’m ordering a coffee or maybe coffee and bagel.

[jon-nyc]

I wonder if this act will be the catalyst that gets McDonald’s, etc to rollout tipping.

[89th]

@jon-nyc said in The No Tax On Tips Act:

Yeah. I spent the last 6 mornings at a hotel with a $39 breakfast buffet and they’d bring me the machine where I had to choose 18, 20, 22% tip or go through the hassle of customizing it.

Customize it, especially if it lets you put in a negative percentage.

[89th]

@jon-nyc said in The No Tax On Tips Act:

I’m getting really tired of tipping while standing at a counter. Maybe if I ordered some fancy dessert drink involving the barista but not when they pour me a cup of drip.

I consistently give no tip at places like Jimmy Johns pickup, drive through coffee line, stadium concessions. I've embraced the horrible feeling I get when I put zero (unless it's a holiday, then I tip to say thanks for working the holiday). I still tip places like haircuts, restaurant/bar, food delivery (we never get delivery though), and random things like a lady who did an awesome face paint job for my son at a school event, I gave her $5 even without a tip jar.

Not that my way is correct, but if you're tired of tipping when you think it's silly... just be the hero, embrace the zero.

[jon-nyc]

I did. The buffet wasn’t even that good as far s I was concerned. I mean it had the requisite fancy stuff you need to justify those prices like lox and strange cheeses but frankly I just wanted my boiled eggs, a yoghurt, and a bagel.