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Switch to cash tipping. Tipping through CC or some other mechanism means at least one other party is involved and takes a cut. Cash tipping ensures the money

Switch to cash tipping. Tipping through CC or some other mechanism means at least one other party is involved and takes a cut. Cash tipping ensures the money at least is seen by the service staff.

dmurray 8y ago
Statistically speaking, the main party missing out on its cut when you tip in cash is the IRS. Not really an ethical concern for most of us, but for those who do feel bad about this, you could just overpay your taxes every year by say 10% of what you estimate you tipped in cash.
- lukev 8y ago
  It is the obligation of the tipped employee to report their tips as income and pay taxes on them. True, it's difficult to audit so sometimes they don't, but that's hardly my problem. The notion that you should overpay your own taxes to solve this is just bewildering.
- jdavis703 8y ago
  The worker is supposed to report all cash tips. Since most of these workers probably pay little to no taxes, it really doesn’t harm the treasury, even if they fail to report.
- kaslai 8y ago
  Recipients of cash tips must report the income to the IRS for taxation purposes. The fact that many people choose to refuse to disclose their cash tip earnings doesn't mean that I should bulk up my taxes to make up for their fraud.
- useful 8y ago
  Companies must now report credit card transactions to the IRS. It's possible for them to see % of cash vs credit and the amount topped in credit. It would not be hard for them to audit you, the worker, if you report lower cash tips than the average than your boss reports in his business.
heimidal 8y ago
I’m pretty comfortable tipping via credit card because I understand that the card company and a bank is taking a cut. I am _not_ comfortable with something like this, where it’s not immediately clear what’s happening.
- deleted 8y ago
  [deleted]
- blincoln 8y ago
  Anecdotally, I've been told by a lot of former restaurant workers that management generally walks off with most or all of the credit card tips. I generally tip in cash everywhere as a result.
  - icelancer 8y ago
    I worked for years as a server and this never happened to me. We just got taxed on them and everyone didn't report their cash tips.

Switch to cash tipping. Tipping through CC or some other mechanism means at least one other party is involved and takes a cut. Cash tipping ensures the money at least is seen by the service staff.

dmurray 8y ago

Statistically speaking, the main party missing out on its cut when you tip in cash is the IRS. Not really an ethical concern for most of us, but for those who do feel bad about this, you could just overpay your taxes every year by say 10% of what you estimate you tipped in cash.

lukev 8y ago
It is the obligation of the tipped employee to report their tips as income and pay taxes on them. True, it's difficult to audit so sometimes they don't, but that's hardly my problem. The notion that you should overpay your own taxes to solve this is just bewildering.
jdavis703 8y ago
The worker is supposed to report all cash tips. Since most of these workers probably pay little to no taxes, it really doesn’t harm the treasury, even if they fail to report.
kaslai 8y ago
Recipients of cash tips must report the income to the IRS for taxation purposes. The fact that many people choose to refuse to disclose their cash tip earnings doesn't mean that I should bulk up my taxes to make up for their fraud.
useful 8y ago
Companies must now report credit card transactions to the IRS. It's possible for them to see % of cash vs credit and the amount topped in credit. It would not be hard for them to audit you, the worker, if you report lower cash tips than the average than your boss reports in his business.

heimidal 8y ago

I’m pretty comfortable tipping via credit card because I understand that the card company and a bank is taking a cut. I am _not_ comfortable with something like this, where it’s not immediately clear what’s happening.

deleted 8y ago
[deleted]
blincoln 8y ago
Anecdotally, I've been told by a lot of former restaurant workers that management generally walks off with most or all of the credit card tips. I generally tip in cash everywhere as a result.
- icelancer 8y ago
  I worked for years as a server and this never happened to me. We just got taxed on them and everyone didn't report their cash tips.