If you have never derived much of your income from tips, you may find this information interesting.
The IRS taxes tips.
How do they do this since there is no way of really knowing how much a person makes? They just take a guess.
I don't know about you but that just sounds scary. Having the government guess about how much money they should take from you is a bad idea.
No taxation without quantification!
If you're a food server in Utah where it's legal for them to pay you less than minimum wage and it's a slow night, you are sitting there for the sole purpose of giving the IRS your paycheck. You're only going to get the tips that you make and it might be 20 bucks for the night.
Nevada pays minimum wage which still means that you're starving to death unless the restaurant is pulling in steady business. Nevada is also talking about changing their law to match Utah's since the Federal government is raising minimum wage.
Nice.
For a long time, Blackjack dealers didn't have to pay taxes on their tips. I don't remember the date but at some point, the IRS figured out that Blackjack dealers were making a living on their tips.
Did they start taxing them?
If your answer was a simple "yes" then I'm sorry but you are not evil enough to be part of the IRS.
The answer is not only did they start taxing them but they also went over years and years of back taxes. They taxed dealers to the point that many would have to work for decades to get out of debt to the government and quite a few dealers committed suicide rather than even attempt it. Live free or die.
Here's some information that is especially interesting if you receive tips. My wife works part time as a food server so this information caught my attention.
Ron Paul is trying to do two things with concern to tips.
First, he is currently trying to get a bill passed that would stop the IRS from taxing tips. His argument is that people in jobs that derive most of their pay from tips are in low paying jobs and therefore, they should get to keep anything that people are willing to give them. Quit taxing the people that are struggling to make ends meet. I would add too that you shouldn't be taxing stuff that's a guess anyway.
Second, he's running for president and if elected (he is actually thinking about what he would do if he were president as opposed to a certain Democratic front runner - I won't mention her name here) he would work to do away with all income tax and the IRS.
His belief is that the government does not own the people of the country and therefore can not just help itself to money in our paycheck. If we work for it, we should get it. I like that thought a lot.
I'm going to start spreading this information around my little casino town where just about everyone makes a living from tips. I think they will find it very interesting.