Monday, January 6, 2014

New IRS rule could cut into restaurant workers’ tips

Even as President Obama and progressive activists are trying to sell the nation on hiking the national minimum wage to help restaurant workers and other low-wage employees, the Internal Revenue Service is seemingly determined to make life harder for those same workers.

A change in tax policy implemented Jan. 1 will prevent restaurant workers from collecting automatic gratuities — the added 18 percent fee many restaurants charge to groups of eight or more — as part of their tips. Instead, that added fee will be included in their payroll, meaning workers have to wait up to two weeks to get that extra cash and must pay additional taxes on it.
It means less money in servers’ pockets and more for the federal government.

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