Tip money from customer must take off 20% tax ??

[hqduc2012]

What is the name of your state (only U.S. law)?
IL

My boss take off 20% tax from tip money.

Is it right or wrong? and WHY ???

Thanks and happy new year.

[LdiJ]

What is the name of your state (only U.S. law)?
IL

My boss take off 20% tax from tip money.

Is it right or wrong? and WHY ???

Thanks and happy new year.

If your boss is taking a flat 20%, its probably not for taxes. I cannot tell you if it is right or wrong, because I don't know why he/she is doing it. It may be to tip out other employees. Ask your boss.

[hqduc2012]

Thanks LdiJ,

I had asked my boss, he told that 20% of tip is the tax pay for gorverment.

He told that All money go to his company (include : pay for food added 11.25% tax + tip from ATM card of customer) must pay tax for gorverment before he pay for me.

I don't know more about rule of tip tax for gorverment.
I want know, Does the rule have? If YES, please give me the web site talk about the tip money tax.

Thank again.

[daria26]

Thanks LdiJ,

I had asked my boss, he told that 20% of tip is the tax pay for gorverment.

He told that All money go to his company (include : pay for food added 11.25% tax + tip from ATM card of customer) must pay tax for gorverment before he pay for me.

I don't know more about rule of tip tax for gorverment.
I want know, Does the rule have? If YES, please give me the web site talk about the tip money tax.

Thank again.

Hi,
I waitressed for 4 years in college and we had a similar situation: the boss was taking money out of our tips "to pay the government". We all confronted him, and said the taxes are paid at the end of the year where you claim your tips on a tax form. i don't believe this thing where your boss says he has to "pay the government" before he pays you. When the tax season comes you claim the amount of your tips and settle it with the government not your boss. Forgive me but your boss sounds like a sleazeball. Good luck

[HomeGuru]

What is the name of your state (only U.S. law)?
IL

My boss take off 20% tax from tip money.

Is it right or wrong? and WHY ???

Thanks and happy new year.

**A: the 20% is your bosses tip. He's just using the tax reason as an excuse.

[tranquility]

Employers are required to withhold income, fica and medicare taxes on reported tip income. Certain places have allocated tip income because of agreements with the IRS as well. While I agree with LdiJ a flat 20% is probably not correct, without the numbers in front of me it is hard to tell.

When you get your W-2 this year, be sure the withholdings are appropriately reported there. If so, you really don't have a problem you can deal with. (Except that you can argue with your employer he is doing it wrong if the percentages are not right.) If not, THEN you have a cause of action and can think (in the back of your mind) you are being cheated.