If someone mentioned it, I missed it, but even if I pay with a card, I leave the tip in cash. That way it’s the restaurant’s call as to how much they report to the government.
I don’t cheat on my taxes, and I don’t feel obligated to help others do it.
I don’t help other people cheat on their taxes. Neither, however, do I assume what other people might have in the way of taxable income. Remember, “income” does not equal “taxable income.”
When you pay someone personally for services, that IS income, and presumptively taxable. At least in the US. If you’re choosing a form of payment specifically to enable the to “choose” not to report it, you’re EXPLICITLY enabling them to underreport their income.
Taxable income is your income less allowable exemptions and deductions. “Cash received for work I didn’t choose to report” is not an allowable exemption or deduction.
I do, growing up in the '70s and '80s. At the time, the state sales tax was an even 5%. People would take the tax amount, multiply by three, and then round up.
Yes, but never 10%. At least not in the last half of the '60s.
A better reason to do that is so the credit card companies don’t take their cut. My haircutter has a sign encouraging cash tips for this reason.
As for tip amounts, I ramped it up when I started going back to restaurants and stuff after the pandemic, when I figured out servers had a lot of catching up to do. I’ve never stopped.
Here in the Midwest, known for people who were/are penny pinchers, tipped 10% in the mid 70s when I was a waitress. Tipping anything more meant that I had done a good job, versus an adequate job. This was not at a place that served liquor which, even then, was known to provide better tips.
Especially when that was the stated reason!
I do sometimes leave a tip in cash, but it’s not because I want to help people cheat on their taxes, it’s to ensure that it stays with the person I want to give it to, not their employer. A favorite trick will be for an employer to “share” tips with other staff who would not usually be tipped. Sounds very egalitarian, but of course the alternative would be that the employer would have to pay those people more.
The deductions that the IRS allows have nothing to do with where your money came from, or in what form you received it. When you look at a 1040, and it says that you have a standard deduction of $X amount, there are no qualifications or exclusions whatsoever on when, where, or how you received that money.
THEREFORE, you should not assume that there is anything wicked or illegal about receiving payment in cash. The fact that you do speaks great volumes about your outlook on life.
Nonsense. Nobody has implied that there is anything intrinsically “wicked or illegal” about receiving payment in cash.
But in this case, the stated reason for paying someone in cash was “that way it’s the restaurant’s call as to how much they report to the government”. Since it is not optional to report income, in this situation the reason for the use of cash was explicitly to facilitate illegal underreporting.
There’s nothing wrong with receiving income in cash - but cash income is supposed to be reported on your tax return. so when someone says they tip in cash because
That way it’s the restaurant’s call as to how much they report to the government.
(the original statement)
They are explicitly saying the reason they tip in cash is so the server doesn’t need to report the income.
I personally tip in cash when I can because I give the server control of the tip (they don’t have to go through the restaurant) and because it’s immediately available to them (as opposed to maybe waiting until payday to get their tips.) If they also decide not to report all their tips, well, that’s up to them. And that absolutely happens – I never reported any cash tips at my coffeehouse or delivery jobs (which were paid at normal non-tipped wages) back in college. None of my fellow employees did. But encouraging tax dodging is not the reason I tip in cash.
This. I prefer to tip in cash because it give the recipient control over the money, not management. A restaurant I used to patronize but won’t any longer would report just enough in tips to make it seem as if its staff were getting the actual minimum wage. But I have it on reliable authority that management was skimming the tips. I’m kinda amazed they are still in business.
And there are crafty ways to do this. Instigate a policy that servers must share tips with (say) cooks and dishwashers who would not normally get tips. Servers look like jerks if they object… but the convenient outcome is that now the management can get away with paying the cooks and dishwashers less.
I charged the meal & cashed the tips for decades. Precisely to foil management skimming.
Nowadays I simply don’t carry cash at all. So servers get a line item on the charge slip and beggars get bupkiss. At work I carry a stack of $1s just for tipping van drivers, etc. In my home life? Nope; no cash.
I pretty much operate the same way. I have a personal minimum tip for low bills. It really hasn’t changed much over the years, but I set it when I found myself dining alone (mostly at diners and lower end chains) frequently and spending a lot of time at the table 20-odd years ago. Also, I grew up in the restaurant industry and everyone I know from that time was a generous tipper. In my experience if you worked in a kitchen, dining room, or bar your tip% was high and often inversely correlated with your income.
Well, the minimum wage was $0 way back then, too. It was up to $0.75 by 1950, though.