The president does have a soft spot for restaurant servers. He wants to give our waitstaff across the country a break. What does this mean for the diners - us and the people who take out orders and bring us our food.
Regular contributor Julia Moskin explored this in yesterday's New York Times Food section president Trump may feel that he's doing people who work overtime as well as serving in eateries a break but maybe not. Many US employed waitstaff make below the federal wage anyway so they're not taxed.This works out for only those making a decent wage of above 33,000 annually (this dips lower for single people). The tax exemption also reaches to baristas,bartenders food delivery people and anyone holding out a payment screen after selling food. There are roughly around two million tipped workers in the United States. These people will definitely have more money in their pockets and won;t have to pay anything unless a workers makes over $160,00 a year. This may go up over time. It's hard to say.. Will this affect the tip minimum wage? The federal minimum wage stays at a shockingly low $7.25 an hour (Many cities and states have higher ones). Employers have been allowed to pay their workers just $2.13 of that They can pay the lower wage only when the worker's tips bring it up to the minimum wage. Then these ARE subject to income tax.
Many diners wonder how much of their tip goes directly to their server.That depends on the workplace and local laws. Some restaurants allow servers to keep all of their tips , while others make waitstaff put tips in a tip pool. This mean sharing with bussers, bartenders and other staff members.The bill will not change this or who gets tips.Another question I s does tipping in cash make a difference.. No.It only reduces a restaurant's credit card processing fees.It doesn't;t leave a paper trail either for employer or employee to track which can increase the risk of tax fraud.some waiters dont; report cash tips which is a kind of tax evasion however the scale of the problem has never been determined. This is changing as more and more diners use credits cards to pay.what about kitchen works like chefs, cooks and cleaners? What's known as back of the house employees cannot receive any tips unless they participate in a tip pool.There are federal regulations guarding tip pools and vary from state to state.Tips will also be a part of payroll, contributing to the worker's Medicare social Security or FicA and unemployment. Employers must pay taxes on this programs based on employees and wages and this includes tips.
These are just some fo the ways that the the no tip tax will impact the restaurant industry. WIll it help the workers. The answer should be yes.
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