Posted by LWM Team on Mon, Feb 08, 2010
Nothing ENRAGED America more than the demand to report tips! Some took a hard stance saying "Taxes on tips SHOULD be paid, because everyone must include all income when filing their taxes". Others thought it was outrageous! Somehow restaurants escaped minimum wage laws by a hair and most only pay a wage of about two bucks. The rest must come from tips. Leaving waitresses to the mercy of either generous or ‘stick in the mud' customers for a decent living. No matter what side of the fence you land on, the I.R.S. says anytime money changes hands THEY get ‘the fair share for taxes.' In 2006 the I.R.S. created the ATIP program. It is an easier program for employers and employees to HELP them ‘do the right thing!' ATIP (Attributed Tip Income Program) has made reporting easier, but may also have contributed to the poverty of restaurant employees... just another kick by Uncle Sam.
The ONLY Thing Voluntary is the Program
The I.R.S. says ATIP is ‘voluntary.' BUT although you can choose NOT to participate in the ATIP program, reporting and paying taxes is mandatory! Employee participation is also supposed to be ‘voluntary', but many waitresses report that they aren't given a choice and their tips are divided and reported, no matter what! An agreement is supposed to be signed by the employee. But some employers simply DON'T HIRE those that do not want to participate... or they don't ask, which is a backhanded approach to the word ‘voluntary.'
On a brighter side the added income reported as tip income CAN help employees with loans, credit scores, and if they have children, it could mean more dollars in earned income credit. But no matter what benefits the ATIP program has, many still feel the ‘tip' should be considered a well earned ‘little gift'...but one should remember there is ALSO a ‘gift tax'!
Posted by LWM Team on Thu, Jan 07, 2010
Nothing ENRAGED America more than the DEMAND to REPORT tips! Some took a ‘HARD STANCE’ saying taxes on tips SHOULD be paid, because everyone must include all income!’ Others thought it ‘outrageous!’ Somehow restaurants escaped minimum wage laws by a ‘hair’ and most only pay a wage of about two bucks. The ‘rest’ must come from ‘tips.’ Leaving waitresses to the ‘mercy’ of either generous or ‘stick in the mud’ customers for a ‘decent living.’ No matter what side of the fence you land on, the I.R.S. says anytime money changes hands THEY get ‘the fair share for taxes.’ In 2006 the I.R.S. created the ATIP program. It is an easier program for employers and employees to HELP them ‘do the right thing!’ ATIP (Attributed Tip Income Program) has made reporting easier, but may also have contributed to the ‘poverty’ of restaurant employees...‘just another kick’ by Uncle Sam, The ONLY Thing Voluntary is the Program The I.R.S. calls ATIP ‘voluntary.’ BUT although you can choose NOT to participate in the ATIP program, reporting and paying taxes is mandatory! Employee participation is also supposed to be ‘voluntary.’ But many waitresses report they aren’t given a ‘choice’ and their tips are divided and reported, no matter what! An agreement is supposed to be signed by the employee. But some employers simply DON’T HIRE those that do not want to participate...or don’t ask, which is a ‘backhanded’ approach to the word ‘voluntary.’
On a ‘brighter side’ the added income reported as tip income CAN help employees with loans, credit scores, and if they have children, it could mean more ‘dollars’ in earned income credit. But no matter what benefits the ATIP program has, many still feel the ‘tip’ should be considered a well earned ‘little gift’...but one should remember there is ALSO a ‘gift tax!’
LWM