Tax Day: Have you hugged an IRS agent today?

[ulmont]

How does a restaurant know how much their wait staff gets tipped?

A lot of places split tips, and the IRS requires staff to report tip income to their employer.

[Admiral Yi]

the IRS requires staff to report tip income to their employer.

You sure about that?  It has been decades since I worked for tips, but I never had to.  Has there been some change?

[ulmont]

the IRS requires staff to report tip income to their employer.

You sure about that?  It has been decades since I worked for tips, but I never had to.  Has there been some change?

If you receive cash, check, or credit card tips of $20 or more in any one calendar month while working for one employer, you must report the total amount of your tips to your employer by the 10th day of the next month. If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report on the next day that is not a Saturday, Sunday, or a legal holiday.

To report your tips, you can use Form 4070, Employee's Report of Tips to Employer.

The link here is to "Taxable Income for Students," but the tip part is generic.
http://www.irs.gov/individuals/students/article/0,,id=96674,00.html

[BuddhaRhubarb]

US tax day is always a nice gentle reminder that I have less than two weeks of procrastinating before I do mine at the last minute, and await my tiny return.

[alfred russel]

Except they don't know they owe you money, and they can't keep track because they don't always get the information they need to compute taxes (that is why you need to complete a return). And if they borrowed money from you, that is your fault--in some cases people can borrow money from the government interest free.

You can get a stamp for about $0.44.

That's even better!

Oh we took some money from you but we don't know if it is the right amount or not. Oh well figure it out, please.

Besides, presumably a person pays both federal and state taxes. That's 88 cents which can almost buy you some "food" at McDonald's!

You realize you can adjust the amount of your withholding? If the amount is too high for you, just have it reduced.

I have no answer for the $0.88 injustice.

[DontSayBanana]

Let's see, for grabon's system of no-file taxes to work we would need:

A method of automatically reporting dependents.National ID system
A method of automatically reporting income earned from self-employment.National ID system
A method of automatically reporting tip income.National ID system
A method of automatically reporting of mortgage interest and other deductible payments.Theoretically possible because of SSNs, but for simplicity's sake, let's say national ID system

Am I missing anything?

Does anybody else see why that wouldn't fly?

[alfred russel]

the IRS requires staff to report tip income to their employer.

You sure about that?  It has been decades since I worked for tips, but I never had to.  Has there been some change?

If you receive cash, check, or credit card tips of $20 or more in any one calendar month while working for one employer, you must report the total amount of your tips to your employer by the 10th day of the next month. If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report on the next day that is not a Saturday, Sunday, or a legal holiday.

To report your tips, you can use Form 4070, Employee's Report of Tips to Employer.

The link here is to "Taxable Income for Students," but the tip part is generic.
http://www.irs.gov/individuals/students/article/0,,id=96674,00.html

What do you think the compliance rate is with that?

Also, none of that will work. There are plenty of employers of US workers that don't give W-2s (underground economy, employers of expatriates), and I don't think there is a requirement mortgage debt be from a bank for the interest to be deductible.

[Razgovory]

God Bless the IRS.  It's the only agency in the government that actually pays for itself.

[ulmont]

What do you think the compliance rate is with that?

I'm guessing the compliance rate with people reporting tips to their employer is about the same as people reporting tips to the IRS.

Also, none of that will work. There are plenty of employers of US workers that don't give W-2s (underground economy, employers of expatriates), and I don't think there is a requirement mortgage debt be from a bank for the interest to be deductible.

If you aren't getting a W-2 or another form, you aren't bothering to file taxes, or at least to report that income, so no worries.

As to mortgage debt, what are these non-bank entities that are giving out mortgages, calculating the interest paid so that the mortgagee can claim it with the IRS, and still not sending the IRS forms already?

[alfred russel]

If you aren't getting a W-2 or another form, you aren't bothering to file taxes, or at least to report that income, so no worries.

As to mortgage debt, what are these non-bank entities that are giving out mortgages, calculating the interest paid so that the mortgagee can claim it with the IRS, and still not sending the IRS forms already?

Disagree--I may not get a W-2 because I'm working in Hong Kong for a foreign company whose HR department doesn't know what a W-2 is.

I don't know how the deduction process works for seller financed homes, but I would expect I could deduct the interest whether or not the seller ever calculates the interest paid.

[garbon]

You realize you can adjust the amount of your withholding? If the amount is too high for you, just have it reduced.

OMG, really? I wasn't aware that I was one of the poor people Cal and deracist were talking about.

Btw, I had to pay more tax this time.

[CountDeMoney]

As usual, I get beau coup bucks back with my return.  Anti-tax sentiment is teh fial.

Although, I have a feeling this'll be the last year for that, since now I make enough money to vote Republican.  MUST FIND MOR LOOPHOLZ

[grumbler]

I don't know how the deduction process works for seller financed homes, but I would expect I could deduct the interest whether or not the seller ever calculates the interest paid.

The seller/mortgage holder must fill out a couple of forms and send one to the mortgage payer before the mortgage payer can claim that interest as deductible.  So, no, you cannot claim the interest if the seller does not ever calculate the interest paid.

[alfred russel]

I don't know how the deduction process works for seller financed homes, but I would expect I could deduct the interest whether or not the seller ever calculates the interest paid.

The seller/mortgage holder must fill out a couple of forms and send one to the mortgage payer before the mortgage payer can claim that interest as deductible.  So, no, you cannot claim the interest if the seller does not ever calculate the interest paid.

I asked my brother, a CPA, and he says that is incorrect. You are required to give the mortgage holder the information to report your interest, and he/she is required to report it, but if the mortgage holder fails in his/her responsibilities, you don't lose your deduction. But when you report, you need to provide the IRS the name, taxpayer ID, and address of the mortgage holder. You also will need to be able to support the amount of interest in the case of an audit.

[alfred russel]

You realize you can adjust the amount of your withholding? If the amount is too high for you, just have it reduced.

OMG, really? I wasn't aware that I was one of the poor people Cal and deracist were talking about.

Btw, I had to pay more tax this time.

Then what are you whining about? You figure out your own taxes and you pay them what you owe. If you prepay too much, that is your fault. Seems fair to me.