Now that no tax on tips is closer is closer to being passed I thought I would help you with how much to reduce your tips in the future to account for it.
It may be difficult to get their taxable income information but I think it is fair to ask for a copy of their W-2 or tax return. Many can pull it up on their phone from the turbo tax app. In some cases you may just have to look them over and make an assumption. If their taxable income is under $48,475 a 20% tip can now be reduced to 17.6% and they are not hurt one bit. If they make a little more than that, feel free to drop it down to 15.6%. Obviously, if they make under around $12,000 (after the standard deduction) they don't pay tax and you won't want to tip at all.
Hope that helps!
It may be difficult to get their taxable income information but I think it is fair to ask for a copy of their W-2 or tax return. Many can pull it up on their phone from the turbo tax app. In some cases you may just have to look them over and make an assumption. If their taxable income is under $48,475 a 20% tip can now be reduced to 17.6% and they are not hurt one bit. If they make a little more than that, feel free to drop it down to 15.6%. Obviously, if they make under around $12,000 (after the standard deduction) they don't pay tax and you won't want to tip at all.
Hope that helps!
