Posts tagged automatic gratuity.
Blogs
3 minute read
By: Kara M. Maciel
Many restaurants include automatic gratuities on guests’ checks with large parties to ensure servers get fair tips. This method allows the restaurant to calculate an automatic gratuity or tip into the total bill, but it takes away the customer’s discretion in choosing whether and/or how much to tip the server. As a result of this removal of a customer’s voluntary act, the IRS has decided that it will separately tax automatic gratuities.
In 2012, the IRS issued a ruling to clarify earlier tax guidance on tips, particularly automatic gratuities, but ...
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