One server’s TikTok has other restaurant workers weighing in on whether they report cash tips or not, and why.
In an eight-second clip that’s pulled over 487,500 views, @alwaysrightblonde highlighted a particular screen on the point-of-sale system asking her to “Enter Declared Cash Tips.” She repeatedly presses the “0” on the number pad, keeping the total amount of Cash Tips at $0.00, while Bhad Bhabie raps, “You really dumb enough to think I’ll tell you anything.”
“Even if there is no tax on tips,” she captioned the video.
Are tips taxed?
In the United States, workers are obligated to pay income tax on all tips received. This holds true regardless of whether tips are paid via card or cash. But in the case of the latter, the onus is on workers to report the amount.
President Donald Trump proposed the idea of no longer taxing tips during his 2024 campaign.
It’s a popular proposal that has nonetheless sparked concerns. And, as of now, legislation has not been enacted to bring it into law.
Should servers report cash tips?
Despite the law technically requiring people to report all forms of cash income, including tips, not everyone does. A 2018 Census Bureau study suggested only 64 percent of tips were reported to the IRS—a number that was actually up from the previous year.
The TikTok posted by @alwaysrightblonde isn’t an admission of a crime. As they pointed out to one viewer, the screen also shows that they actually had no tables pay in cash that day, so there wasn’t actually anything to report.
But it did spur commenters to confess that they tend to underreport their cash tips, providing anecdotal support to the statistical claims.
“IRS for sure thinks I’m the WORST server ever,” wrote @ariessun444
“My old manager was like ‘it’s between u and the IRS it’s none of my business,’” @poopypeets chimed in.
“99% of tips are on credit cards nowadays guys and autoreported,” @odetsab explained, “so no i’m not gonna report my 40$ cash just to get more taxes taken out i already lose like 400$ a paycheck in tax.”
@alwaysrightblonde Even if there is no tax on tips #servertiktok #tiktok #fyp ♬ Ms. Whitman – Bhad Bhabie
What are the drawbacks of not reporting cash tips?
Legalities aside, several people pointed out that there can be other consequences to not reporting cash tips that may not initially be considered.
“Girlie pls claim something!” urged @martinezxmiaaa. “It’ll be helpful in the future if you’re trying to get a car, apartment, house, etc.”
“You will regret this if you want any type of loan,” @cass_a_dilla added.
Tips can easily make up over half of a server’s income. Even if the majority of that ends up being paid via credit card and automatically reported, the discrepancies could add up to enough over time that it makes a person’s income, on paper, fall below the threshold needed for rent or loans. This may not be as important to some people as having that extra money on hand immediately, but it is still worth keeping in mind.
Another possible drawback, as pointed out by @a0wtf, admittedly drew much less concern.
“I rlly hate to be like this but if you serve for long-term this will mess up your social security payout later in life,” they wrote.
With a laughing crying emoji, another viewer responded, “we will not have social security when we’re old.”
The Daily Dot has reached out to @alwaysrightblonde via TikTok comment.
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