Quote:
Originally Posted by retiredguy123
The server doesn't need to declare 100 percent of their tip income. The IRS has an 8 percent rule for restaurant tip income. The restaurant is required to calculate 8 percent of their total gross income and provide a Form W-2 to each tipped employee based a proration of the number of hours they worked during the year. Then, the employee can either pay income taxes based on the W-2, or they can dispute the amount and declare a smaller amount of tip income.
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Facts are better than anecdotes...