Tip Changes

A lot of restaurants in South Florida include the tip in your bill. But that practice may change in the next year because of new tax rules. 7’s Lynn Martinez explains in tonight’s Money Monday.

WSVN — They are the people in charge of making sure your dining experience is great, and they work hard for their money.

Waiters and waitresses are paid below minimum wage with the bulk of their pay coming from customer tips.

Oscar Melgar, server, Cafe Prima Pasta: “The tip is reflected on your performance on the table, so sometimes it can be very good, other times it can be misunderstood by the customer as well.”

Because South Florida gets so many foreign visitors, some restaurants here automatically add the tip to the bill.

Henry Villar, bartender, Cafe Pasta Prima: “The tourists, they come in, and they have a different philosophy, and they don’t tip you, but they don’t know … They come from a different culture or tradition, and they don’t do it.”

But, come Jan. 1, many restaurants may drop the automatic tips because of a new IRS rule.

Giuseppe Marino, general manager, Cafe Prima Pasta: “So, I can see many different restaurants doing away with the policy altogether, just because of the work that’s involved.”

Starting Jan. 1, tips added directly to the bill will be considered “non-tip wages,” which means restaurants will have to report that income to the IRS and pay social security, medicare and federal income taxes on that money.

And since the amount will be different every night, depending on how big the tabs are, it could mean mounds of paperwork.

Marino: “You know, it will be two different structures of payment and taxable income.”

Of course, servers count on the added tips and are worried the IRS ruling will affect their paycheck.

Villar: “At the end, it’s money. I’m a family person, so everything I make, I contribute to the future of my kids, try to build a better future.”

But they hope the customers will continue to show their appreciation through good tipping.

The IRS is also targeting delivery charges for pizza, luggage assistance, even bottle service charges.

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