Originally Posted by
Analise
Is there a special W2 form, for waiters to submit to the IRS, geared specifically for the restaurant industry that has the restaurant populate on the form what the gross sales were (or is it net?) for the entire year at that particular restaurant or chain of restaurants?
A 5-second search for "tips" on
www.irs.gov reveals this page, among many others:
http://www.irs.gov/taxtopics/tc761.html
It's usually helpful to go to the source when asking such specific questions, rather than asking a nebulous population for anecdotes. The IRS website actually has many "user-friendly" pages that explain certain aspects of the tax code in layman's terms fairly well.
Originally Posted by
Analise
Did the restaurant's estimate of the amount of money they think you earned in tips using a formula show up in black and white as your reported income on your annual W2 from them?
Again, from the IRS website, tips - whether actual or allocated - are included in box 1 of the W-2: "Wages, tips, other compensation."
Originally Posted by
Analise
I'm absolutely astonished that this practice is legal.
It is not only legal, it is
law - as in, it's not just allowed, it's required. The reason few people complain is that allocated tips are only 8%, while average actual tips are generally much higher... unless, of course, a large fraction of customers decide to stop tipping.