Long Distance Train "Fun"?
#31
#32
Join Date: Feb 2008
Programs: AGR
Posts: 120
flitcraft
I appreciate the changes to your post. I am not a lawyer and you probably can bury this topic with words. Please keep withholding amounts and taxes separate. The required withholding for tip income, based on 8% of sales, is an anticipated tip income. This is adjusted when the employee files his return. The 8% of sales is not a tax on the employee. This is not a loss of income.The actual tip amount reported could be zero, in which case the withholding can be recovered.
Simply stated
Amtrak employees do not pay taxes on tips they did not receive.
I appreciate the changes to your post. I am not a lawyer and you probably can bury this topic with words. Please keep withholding amounts and taxes separate. The required withholding for tip income, based on 8% of sales, is an anticipated tip income. This is adjusted when the employee files his return. The 8% of sales is not a tax on the employee. This is not a loss of income.The actual tip amount reported could be zero, in which case the withholding can be recovered.
Simply stated
Amtrak employees do not pay taxes on tips they did not receive.
#33
Join Date: Apr 2004
Posts: 1,614
I generally have a split of wine, which builds up the check, but in answer to your question, $10.00 or more and always in cash.
My rationale is generally to determine what I would actually pay for the meal and beverages if I weren't in a sleeper, and use that as the basis for determining the gratuity.
My rationale is generally to determine what I would actually pay for the meal and beverages if I weren't in a sleeper, and use that as the basis for determining the gratuity.
#34
Join Date: Nov 2006
Posts: 172
Dickboat,, you are simply incorrect, and putting it in bold does not change that. Here is the rule on imputed allocated tip income that applies to large employers:
8 percent of gross receipts, allocated to tippable staff prorata, will be presumed the taxable income from tips.
If the employee makes more than that in tips, it must be reported on top of the imputed 8%.
If the employee makes less than 8 %, the burden of proof is on the employee to provide documentary proof that they made less than that in tips. If they cannot do it, they must pay taxes on that 8%. Even if they did not receive it.
This comes up in my practice every few years when the IRS decides to take after wait-staff for audits. My 'pro bono' cases those years include a smattering of waitstaff, getting hit with the tax and shocked that it is up to them to keep records to prove they didn't get the tips. (Full disclosure--I've never represented an Amtrak server in such a case, but I have represented other servers in that situation.) It's worth it for the IRS to chase after these cases, because underpaying the social security and Medicare taxes on imputed tip income hits you with a 50% penalty. Which I suspect is the real reason the IRS periodically prioritizes these audits.
To the OP: sorry for the digression from your original question. Let us know about your experiences if you decide to take the Sunset Limited. And don't bother to tell us how much, if any, you tipped... ;-)
8 percent of gross receipts, allocated to tippable staff prorata, will be presumed the taxable income from tips.
If the employee makes more than that in tips, it must be reported on top of the imputed 8%.
If the employee makes less than 8 %, the burden of proof is on the employee to provide documentary proof that they made less than that in tips. If they cannot do it, they must pay taxes on that 8%. Even if they did not receive it.
This comes up in my practice every few years when the IRS decides to take after wait-staff for audits. My 'pro bono' cases those years include a smattering of waitstaff, getting hit with the tax and shocked that it is up to them to keep records to prove they didn't get the tips. (Full disclosure--I've never represented an Amtrak server in such a case, but I have represented other servers in that situation.) It's worth it for the IRS to chase after these cases, because underpaying the social security and Medicare taxes on imputed tip income hits you with a 50% penalty. Which I suspect is the real reason the IRS periodically prioritizes these audits.
To the OP: sorry for the digression from your original question. Let us know about your experiences if you decide to take the Sunset Limited. And don't bother to tell us how much, if any, you tipped... ;-)
#35
Join Date: Feb 2008
Programs: AGR
Posts: 120
Dickboat,, you are simply incorrect, and putting it in bold does not change that. Here is the rule on imputed allocated tip income that applies to large employers:
8 percent of gross receipts, allocated to tippable staff prorata, will be presumed the taxable income from tips.
If the employee makes more than that in tips, it must be reported on top of the imputed 8%.
If the employee makes less than 8 %, the burden of proof is on the employee to provide documentary proof that they made less than that in tips. If they cannot do it, they must pay taxes on that 8%. Even if they did not receive it.
This comes up in my practice every few years when the IRS decides to take after wait-staff for audits. My 'pro bono' cases those years include a smattering of waitstaff, getting hit with the tax and shocked that it is up to them to keep records to prove they didn't get the tips. (Full disclosure--I've never represented an Amtrak server in such a case, but I have represented other servers in that situation.) It's worth it for the IRS to chase after these cases, because underpaying the social security and Medicare taxes on imputed tip income hits you with a 50% penalty. Which I suspect is the real reason the IRS periodically prioritizes these audits.
To the OP: sorry for the digression from your original question. Let us know about your experiences if you decide to take the Sunset Limited. And don't bother to tell us how much, if any, you tipped... ;-)
8 percent of gross receipts, allocated to tippable staff prorata, will be presumed the taxable income from tips.
If the employee makes more than that in tips, it must be reported on top of the imputed 8%.
If the employee makes less than 8 %, the burden of proof is on the employee to provide documentary proof that they made less than that in tips. If they cannot do it, they must pay taxes on that 8%. Even if they did not receive it.
This comes up in my practice every few years when the IRS decides to take after wait-staff for audits. My 'pro bono' cases those years include a smattering of waitstaff, getting hit with the tax and shocked that it is up to them to keep records to prove they didn't get the tips. (Full disclosure--I've never represented an Amtrak server in such a case, but I have represented other servers in that situation.) It's worth it for the IRS to chase after these cases, because underpaying the social security and Medicare taxes on imputed tip income hits you with a 50% penalty. Which I suspect is the real reason the IRS periodically prioritizes these audits.
To the OP: sorry for the digression from your original question. Let us know about your experiences if you decide to take the Sunset Limited. And don't bother to tell us how much, if any, you tipped... ;-)
My simple hypothetical was of an employee who reported zero tips on his return because he had zero tips. You claimed he would still have to pay a tax on tips not received. I said nothing about an employee illegally not reporting tips. That was your tangent from this discussion . Your statement quoted above agrees with mine for the honest Amtrak employee. The zero tips show up on the sales receipts as proof.. Therefore, the employee can recover the allocated tip withholding on his tax form. I will rephrase my simple statement .
Amtrak employees, with proof of receiving no tips, do not pay taxes on tips not received.
OP also sorry, this ends it.