Skip to comments.Taxes Take Chunk of Bartender's Hefty Tip
Posted on 09/08/2006 12:38:51 PM PDT by freepatriot32
HUTCHINSON, Kan. (Sept. 7) - A bartender who last week was left a $10,000 tip by a regular customer now has more than the excitement of the offer: she has the cash.
Cindy Kienow received a check Tuesday from Applebee's franchise owner JS Ventures Inc. for about $6,300, her share of the tip after taxes.
The customer gave Kienow the hefty tip Aug. 27 on a $26 meal. But since he paid by credit card, the restaurant wanted to make sure it was a valid charge before giving Kienow the money.
"I've had a lot of fun," Kienow said of the last week, which has included interviews with media from across the globe. "A lot of customers are like, 'I can't afford to sit at the bar anymore.' It's been really crazy."
Restaurant officials have declined to identify the tipper.
"I hate to say it, but I really don't know him," Kienow said. "You become friends with your customers ... I think he just appreciated the fact that I took the time to talk with him."
Kienow, 35, said now that the media frenzy has died down, she is content to keep serving customers at the restaurant, where she has worked for the last eight years.
"That's the pure joy of my job, that I just get to talk with people," she said.
As for what she'll do with the money, Kienow has said she got the impression her customer wanted her to buy something special, adding that "there's a Jeep that I've had my eye on for a while."
$6,300 is not a bad for a tip anyway. I'd be happy with it! :-)
I wonder if it's the first time she's paid taxes on her tips...
It won't buy a Jeep.
No. The IRS makes sure that tips are taxed (or at least estimated before they're taxed). Can't miss any income.
That's why I usually tip in cash even if paying with the card (not that anyone's ever going to get a $10,000 tip from me....).
Sometimes the government really REALLY pisses me off.
And, thus, is another conservative made.
Still, for the feds to steal $3,700 from an honest working waitress amounts to highway robbery.
Another fine example of HOW families are being destroyed by the tax attornies - it takes both mother and father to make enough to try to feed and clothe one family.
Toss in the added cost if they actually want to educate their children and very few are left that can.
What she could have done with the rest of HER money .... it is now in the hands of ......
"I've had a lot of fun,"
For $10,000, SOMEBODY better have had fun.
This is a publicity stunt.
As a waiter, she will probably get a lot of that deducted tax refunded when she files next year as it won't push her into that high a bracket for the whole year.
The IRS just likes to make sure you know whose money it really is before they give you back any of it.
Don't worry, they'll give some of it back. Eventually. Without interest.
It's alot of money but I'm used to it. I get taxed alot and I don't make alot of money. But then I live in NY. LOL
Jenjis John and TeRAYza Heinz-Kerry pay an effective rate of about 12% on their income (I think that was the percentage - it came out during the 2004 campaign). Too bad the waitress can't afford an army of accountants and lawyers to show her how to shelter her income from the federal/state/local maw.
What is best for the waiter/waitress? Most times, I never put the tip on a card. I always leave cash and leave it up to the waiter/waitress to decide who gets what. But, there are times though where I'll pay a bare minimum tip with the card and leave some cash for the wait staff on the table.
The customere should have given this to her as a gift. In that case the $ 10 000 would have been free of taxes to both.
She'd be able to keep all of that $10,000 under the FairTax. This is just another illustration of why we need HR/SR25 to be passed and the 16th amendment abolished.
They probably annualized the amount for tax purposes...stupid payroll companies. I had a bonus check once that was withheld at a higher bracket because it was higher than my normal check. Annualized, it was as if I was making $half a mill.
And I say again, sometimes the government really REALLY pisses me off.
Not to mention it was already taxed when it was income to Mr. Big Tipper. The feds dipped into that same 10k twice. And when the bartender buys her new jeep she can pay tax yet again. What a ponzi scheme.
Did she switch party registration yet?
little reported factoid - they steal from the poor military also --- but you will never hear about it. A full 20-25% right off the top of any re-enlistment bonus.
And then the damned congress taxes "moving" as taxable income since the military usually does the moving.
I hate government...
$10,000 tip - taxed.
$10,000 gift - No tax.
$10,000 gift, she goes home with him. - Crime!
Remember that in the middle ages people gave the King about 15% of what they produced or earned and they were called Serfs. We now give the Goverment [local, state,and federal] between 35% and 45%of what we earn, what does that make us? I would rather be a serf than a slave!
Hmm... she might still qualify for Earned Income Tax Credit. Get some of that back.
Although the RNC hasn't been much better of yet.
New IRS 1040-2007
1. How much did you make last year (wages, tips, interest, dividends).
2. Send it in.
At the rate things are headed, she'll probably have to pay the AMT.
"And the government takes 37% off the top.
Sometimes the government really REALLY pisses me off."
The lower 50% of workers pay only 2% of Federal Income Taxes. If she is in this bracket, depending on her circumstances, she'll probably get most, if not all, of the $3,700.00 back.
Well, at least the 37% went for the common good.< /sarcasm >
I wouldn't have told anybody.
and beats the heck out of...
"hey...plant your corn early!"
If we make congress pass THE FAIR TAX HR/SR 25 then all she'd have to worry about is the 23% tax she'd pay when she buys the jeep! check out fairtax.org
Everyone on this forum should be supporting this, well everyone who disagrees with the Fed Govt. stealing a percentage of income before the earner even gets the first penny.
she'll probably get most, if not all, of the $3,700.00 back
better not to loose it in the begininning...
People pay all sorts of taxes and they don't realize it. Look at a car rental, hotel, airline receipt.
Huh? So you're implying that it is okay for the government to steal from others who are not honest, working, waitresses not waiting tables on a highway?
Believe me, you always pay taxes on tips. You might be able to get away with paying taxes on less than you actually made, but you still have to pay taxes. There's a federal law that the restaurant has to keep track of your sales as a waiter or waitress (I don't recall if they have to do it for bartenders), and at the end of the night, you have to declare at least a minimum percentage of your sales as tips. There had been nights where I hadn't made that much in tips, but I was still taxed om more than I made. I usually just declared the difference between what I had left over after my payout, minus what I had when I started my shift (we had to start out with enough to be able to make change).
The withholding is based on a rate schedule. That's why I do not like annual bonuses. If your base salary is 50k and you get a 25k bonus, they withhold at the 75k bracket.
It depends on how the it's reported.
Excellent point - tho it would be nice if gestures such as this were somehow beyond the purview of the government taxation i.e. gift-tips. For that matter, why aren't prices just listed with taxes figured in? (If one really wants to get in trouble, start paying workers their full wage and have them count out the cash back in various state, local and federal taxes. It may actually be illegal to do this, not sure on that.)
It's time for the FairTax!!!
Her actual cost would be the price of the Jeep (reduced by the removal of the income tax) plus that price times her effective FairTax rate - which is almost always much lower than her effective income tax rate was.
The untaxed price of the Jeep could easily drop from $25,000 under the income tax to, say, $22,500 under the FairTax.
Note that under the income tax she would have to have earned (at an effective income tax rate of, say, 9.76%) $27,704 for her "$25,000 Jeep". Under the FairTax she'd pay the $22,500 price plus the FairTax 23% ti but that cost would be reduced by the $5,290 prebate under the FairTax. Even if she financed some part of the purchase, the interest on her loan should be a couple of points lower than under the income tax as well compared to the rate under the income tax.
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