how much to claim for tips- please help
 how much to claim for tips- please help
mysteria2001
mysteria2001 Member (371posts)
3/8/2005 11:32:00 AM
Anyone who works in the service industry- this is for you.

I went to do my taxes yesterday, and the guy told me it is pretty much expected for me to claim 200-400% in tips. There is NO WAY I made 14,000-28,000 in tips!!!!! NO WAY!!!


I was told at work that you should claim about 15% of your total wage.

What do you guys claim? What have you heard about claiming tips?
please help tongue

bitterspice
bitterspice Member (7551posts)
3/8/2005 11:35:00 AM
Who the hell is your accountant? He should be killed.

I haven't served for a long time, but I know I only claimed a small percentage of what I actually made.

Darth_Tater
Darth_Tater Promoter (3958posts)
3/8/2005 11:36:00 AM
A reasonable amount should be around 10% of your wage. That's all that I claimed. They typically only audit if you claim nothing or claim something like 1%.

JohnnyGoodtimes
JohnnyGoodtimes Member (3609posts)
3/8/2005 11:48:00 AM
I've heard that there is a minimum...someone on here in accounting should reply to you soon enoughsmile

I've heard from a few people that they go over the minimum and pay around 25% and they have never been audited.

nunca
nunca Member (1392posts)
3/8/2005 12:06:00 PM
Hehe...I'm getting back $1600US and $700 Canadianblush Oh yeah, this was about service industry taxes huh? mysteria, PM SlyeIncognitowink

Slyincognito
Slyincognito Member (807posts)
3/8/2005 12:49:00 PM
Heh. Nothing like being the resident accountant.

Do you want legality, or do you want what you can get away with?

Legally, you're required to track every dime you make in tips in a ledger. At the end of the year, you tally that up, and report the exact amount of tips earned as income. It's all income, it's all taxable.

That's the law.

However... wink

What you actually claim depends entirely on the establishment you work for. Some restaurants actually track Visa sales, debit sales, etc. If your restaurant does, you can ask for a total sales print out of the year. Claim 10% of your sales.

Why? Because in the event of an audit, that's the number they're going to go back to. Remember the Canada Revenue Agency doesn't have to prove you made X number of dollars. You have to prove that you didn't make X number of dollars.

If your restaurant doesn't track sales by server however, claim a reasonable amount. 10% of wages is *not* reasonable. Everyone knows you made more than that. A lifestyle audit will blow you out of the water. Claim enough that you reduce your refund a bit, but not so much that you owe taxes.

CRA has an ongoing "project" on service industry staff, so it's best to get a few hundred dollars less on your refund, instead of calling your file into question and having them lifestyle audit you on the past several years of your life.

Any other questions? big grin

mysteria2001
mysteria2001 Member (371posts)
3/8/2005 12:52:00 PM
well as it is, with NO tips claimed, I only get $100 back for 2003. I could claim 50% of my wage in tips, and reduce it to $50 back.

Should I claim 25% of my wage? 50%? I dunno.......

JohnnyGoodtimes
JohnnyGoodtimes Member (3609posts)
3/8/2005 1:07:00 PM
Go high and screw the 50 boneswink

Slyincognito
Slyincognito Member (807posts)
3/8/2005 1:08:00 PM
I'd have to see your numbers exactly before advising you, to be honest. That, and bill you. wink

But, to keep things in generality, with a refund that small you're best to sacrifice the whole thing, claim as many tips as possible and reduce it 3 dollars and someodd cents. The government won't issue a cheque, you won't have to pay anything, and everyone is happy. Keep the refund below 5 dollars, but make sure it's not an even number. Likewise, make sure your tips aren't an even number either.

Hope that helps.

mysteria2001
mysteria2001 Member (371posts)
3/8/2005 1:10:00 PM
ok thanks a lot
i will claim almost 100% in tips

for n\both years. and as of today, start keeping track of them daily

«SôùlHø®ïzôÑ»
«SôùlHø®ïzôÑ» Member (6134posts)
3/8/2005 1:28:00 PM
Get a Day job, bartend at night, cash tips, no audits, lots of cash. wink

Slyincognito
Slyincognito Member (807posts)
3/8/2005 1:34:00 PM
Preferably have the bar pay you entirely in cash, so there's no additional T4's on file. wink

Granted, if they lifestyle audit you, you're ****ed. big grin

Silvergrl
Silvergrl Member (4254posts)
3/8/2005 4:20:00 PM
usually i claim about 500$ for each month i work fulltime in the service industry (at a restaurant).
I like jobs that deduct tax and tips for you.. then you dont have to worry!

I usually aim high. reaaaaaal high.

cursive
cursive Member (10posts)
3/8/2005 7:08:00 PM
my boss told me to claim about $1500 tips.... but that seems low compared to what everyone else is saying.

Jazzzz
Jazzzz Member (2071posts)
3/8/2005 7:27:00 PM
my buddy did not claim enough...when he worked at cowboys....they audited him and now they want 3k back

BobaSteve
BobaSteve Member (242posts)
3/8/2005 7:57:00 PM
Rev Can came into a bunch of bars several years back and actually looked at a whole bunch of positions and the sales associated with them. Paul V co-operated and turned over all the sales sheets as required by law we keep and they basically had a template in which they can revue certain positions. Paul had his own troubles with Rev Can and ended up paying in the hundreds of thousands at the end of it. You work Bartender at C-boys on Main 1 for say 1 night a week they then can say that Main 1 did 2 million in sales and at 10% tips is 200000. 1 night a week is 50000 and so if you were 1 of 4 bartenders we think you made 12500. They even broke down Stampede week on the patio so even working one week and you make away like a bandit then they can follow. Best bet is to talk to others who work in your place of work and in similar postions(bartenders with bartenders, shooter girls with shooter girls) and ALL of you get your story strait. A certain shooter girl got antsy a few years back and declared 100% and ended up screwing quite a few others who thought they were on the same page. I of course declared everything.......but got alot of money back on the 92 crippled orphans I take care of......ya there was little Juan, Jimmy, Tina, Manny, Prince Jr., that one with the limp, chuck........

BobaSteve
BobaSteve Member (242posts)
3/8/2005 8:01:00 PM
And an excellent excuse to where all the money came from??? Poker tourneys! ahhahahaha I be silent now!

Darth_Tater
Darth_Tater Promoter (3958posts)
3/8/2005 8:29:00 PM
Live on the edge...tell them that you're a dishwashaaaaatongue

_Kana_
_Kana_ Member (6178posts)
3/8/2005 8:53:00 PM
Can they really be that accurate as in Bobasteves post?

10% in a place like cowboys doesnt seem right to me. What would a person tip, a buck on a drink? the small change? whatevers left from whatever bill was given? Its all over the place. Guys buying doubles or rounds for a group and tipping ****ty.

Seems to me theres not really a correlation between sales and tips that can be that accurate... i would give most likely the same 1-2 dollar tip on a $8.75 drink as i would on the $2 hiball drink special.

Then ya got tipping out other staff and all that crap. Oh and what if your a student working only one night a week or say you only get ****ty shifts and the bar cleans up on everyone elses..papertrail shows you should be doing well.

Meh, too confusing..probably better off just keeping somesort of log what you make each shift.

Slyincognito
Slyincognito Member (807posts)
3/9/2005 7:04:00 AM
quote:
Meh, too confusing..probably better off just keeping somesort of log what you make each shift.

You're exactly right.

If you truly wanted to be smart about it, you'd keep a detailed log of every night you worked. Except, you'd only record half your tips. At the end of your shift, you'd keep half in cash, and you'd put half in the bank.

In the event of an audit, the CRA tells you they assumed you made, for example, $40,000. You provide them with your log that says you only made $20,000. Then they go to your bank, which shows that you only deposited $20,000 over the course of the year.

You've met your onus of proof, and they go on their way.

_Kana_
_Kana_ Member (6178posts)
3/9/2005 8:18:00 PM
^Ah! good thinkin! Stick it to the man! wink

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