What Has Government Done to Our Tips?

Desperate IRS on Mission to Squeeze Tip-Income Jobs By Yaël Ossowski | PanAm Post Waiting tables is hard work, but it’s especially hard when Uncle Sam is on your back. On January 1, the Internal Revenue Service of the United States began taxing automatic gratuities intended for employees in service jobs. This rule change mandates payroll withholding for the tips that servers receive when waiting tables of six or more people at restaurants. The IRS claims these tips are actually “service charges” and are therefore “wages for tax purposes,” meaning they are subject to Social Security, Medicare, and federal income taxes. The rule was unveiled in June 2012 […]