These Dems are trying to figure out way to pay for their cockamamie ideas, and so they are trying to get more taxes from those who earn the least … minimum wage food servers.
The Internal Revenue Service announced it is proposing a new voluntary tip reporting program to improve tip reporting compliance by employers of service industry workers, such as servers.
The IRS requires employees who earn at least $20 a month in tips to keep a daily record of their tips to give to their employer. All of those tips are then required to be included on tax returns.
Employers are then required to withhold taxes on income earned from tips.
On the other hand, according to established IRS rules, every taxpayer can gift up to $17,000 per person, per year. This is called the annual gift tax exclusion amount. A married couple filing jointly can each give $17,000 ($34,000 total) to the same person in one year with no gift tax reporting consequences as of Jan 1, 2023.
So let me make sure that I understand … I can give an individual up to $17,000 per year with no tax consequences for anybody. Yet, if I give a waiter/waitress at a coffee shop a tip of $1.00, he/she must report this to the IRS, especially if he/she receives more than $20 per month in tips. If I always go to the same coffee shop every day, and give the same $1.00 tip to the same server each day, then in a month that server would have to pay taxes on that $30.
What if I say that I am not tipping, but rather I am gifting that server $1.00 each day? So in a full calendar year, I would gift that waiter/waitress $365, which is well short of $17,000, and thus would not be taxable. Of course, the IRS would frown on this. Perhaps the way around it would be for the coffee shop to put up a sign saying:
NO TIPPING.
HOWEVER,
GIFTING IS ENCOURAGED!
2/10/23
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