I'm a waitress; what % of my tips does the IRS get?

Question

I'm sure it's not as simple as a "__% of tips earned;" probably a lot of variables involved including other income (if any), living situation (dependent or not), etc...but is there some general, average "rule of thumb"? I know I'm not REQUIRED to have this information as the employer keeps track (and notifies the IRS) of tips claimed each night, and it's the IRS's job to figure out the rest, but I'd like to have some idea of how much of the $$ I THINK I make is actually still mine come April. :)

If it helps, I live at home (my folks claim me as a dependent), I wait tables three nights a week and make anywhere from $20-$100/shift (yeah...the economy sucks, as do cheap people :-)). Add the babysitting (~$90/week), and I make...not a whole lot.

Thanks for any help/input you can provide!

Answer 1

Best Answer - Chosen by Voters

How come you don't know what your employer is taking out?

Can't they pull a snow job on you if you don't ask and follow up?

Don't get me started on the IRS stealing voluntary gifts, anyway.

Just don't let your employer have a free reign on your hard earned money.

Answer 2

The law is that you report 100% of your tips.

This is added to your wages. The employer calculates your fica/mc (7.65%), calculates your withholding (plan on 10-15%) and then subtracts these out along with the cash tips you didn't actually give him.

Your paycheck will show total income for a pay period and ytd income. As a dependent, your income is taxed for income tax purposes once it gets above $5700. (then the next $8350 is taxed at 10%.) By the way, the babysitting money is reported as wages on your tax return. Since you may not have a W-2, you list it as HSH $XXX.

Answer 3

IRS isn't taking any specific % of your tips,
however those tips apply to your overall gross income will reflect the % of your tax liabiltiy
in your case
you live at home and parents claim you? are you 19? if you are not in school they can no longer claim you at that age
you best declare your tips that you receive because the employer is obligated to allocate a certain amount on employees who do not report their tips, and in some cases this might be detrimental to your income situation

Answer 4

He takes out different amounts based on income. Thats why they want you to report all your tips so they can take more out. There's no way to generalize how much they take, but you should look at your check stubs and see. I know your checks are probably $0 anyway like most servers but it will show what they are taking out.

PS the reason checks are so small is because they take the taxes out of the $2.13 so you don't have to pay at the end of the year.

Source(s):

9 years serving and bartending