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Tip Income


Roberts

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I'm working on some continuing education - like to get the bulk of it done before vacation each year! The segment is on tip income and I notice something odd:

 

When most people think of a profession that is largely driven by tips, naturally the food service/restaurant industry comes to mind. Few other professions rely as heavily on the generosity of their clients instead of the pay of their employer. However, there are a significant number of other jobs and professions that do count on gratuities to supplement, if not comprise the bulk of, their regular income.

Some examples of these other industries include:

taxi/limousine drivers

hairdressers/stylists/ barbers

card dealers/casino workers

golf caddies

airport skycaps/employees

bartenders

hotel employees/housekeeping staff

delivery people

landscaping/gardeners

exotic dancers

child care providers

valet parking attendants

pet groomers

gym attendants

manicurists/pedicurists

masseuses

tax preparers

 

 

 

We are supposed to be getting tips? :wall:

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Tip on how to clean your bird.........h35008.gif......

 

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Years ago when I worked at HRB, I had ONE client who'd tip me. He was a state policeman. Actually, he'd bring his mother for her tax return and tip me on behalf of her, also.

I do have clients who bring me flowers sometimes and have had some food from time to time. But, not often, not often at all.

This year with no one coming to my home office, I haven't received anything. But, I don't remember receiving anything last year, either.

I have colleagues tell me they get a pricey bottle of their favorite liquor each year!

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I have received one plant for Christmas.  In 2010 I think.  That's all I have ever received from anyone.  People in my entitlement zone think they are paying me too much to begin with.  But I have a client that is a hairdresser, and he literally places his fees at odd dollar amounts just so people will say "keep the change".  That's the only tip he gets.  I might employ his strategies and try to pick up an extra 2 or 3 dollars.

 

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We've been giving HUGE tips when we pick up food and to the UPS/FedEx/mailman who deliver to our house, etc., to show our appreciation. We paid our house cleaner to NOT work. The size tips we give each Christmas, but we'll still tip big at Christmas. My hairdresser opened up this week, but I'm not ready to go yet. I've set aside big tips for her and for my nail lady when I'm ready to go out.

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Got a big one yesterday.   Won an EIC audit for a client.   They got a big check - so they added 50% extra to the check they sent me for my bill. 

BTW, they were totally entitled to the EIC, these were not scammers.   I like it when the good guys win and the nasty tax agents without a clue lose.   Makes me feel good to get for my clients what the tax law says they should get.   

Tom
Modesto, CA

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I have received numerous cash tips over the years.  (I consider flowers and booze and fruit to be gifts.)  Often they come from the people who can least afford it.  I try to refuse, tell them I'm paid very well, but I've come to realize that they have a need to express their appreciation that way and I hurt them if I don't accept.  The cash goes into the office ice cream or pizza pool, so I've never reported it.

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20 hours ago, schirallicpa said:

But I have a client that is a hairdresser, and he literally places his fees at odd dollar amounts just so people will say "keep the change".  That's the only tip he gets.  I might employ his strategies and try to pick up an extra 2 or 3 dollars.

 

I never realized this but that's why so many bars price beers at $3.50 instead of $3 or $4. Many years ago my barber (when I had hair) went from $8.50 to $9.00 to get a haircut. I joked with him that it was a pretty big percentage raise and he said he didn't make any extra money. Everyone always paid him $10 regardless but now he has to share more with the owner. He said he didn't think he'd get an actual raise until he raised it to $10.50.

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13 minutes ago, ILLMAS said:

Can you imagine someone going through college and law school on tips?

I went through college on tips (not law school).   I had a family at the time and my spouse did not work, she stayed home with the kids.   We were poor, but we made it on bartender tips.  I was even able to buy our first home at the end of my senior year of college on those tips.   The right restaurant can be very well paying for some of these tipped employees.

Tom
Modesto, CA

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5 hours ago, BulldogTom said:

I went through college on tips (not law school).   I had a family at the time and my spouse did not work, she stayed home with the kids.   We were poor, but we made it on bartender tips.  I was even able to buy our first home at the end of my senior year of college on those tips.   The right restaurant can be very well paying for some of these tipped employees.

Tom
Modesto, CA

I wonder what percentage of those tips went into the Bank of Tom. 😁

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In our practice, the few clients who pay cash are almost all hairdressers and waitstaff.  One is a waiter in a pretty fancy place and he pulls in over $80k a year.  He has a lovely British accent, and I wonder if he gets bigger tips because of the charm factor.

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Several years ago had I clinet   (married, both students) that started a valet service. Offered to a couple of big name restaurants .  No Charge to venue or patron. Tips only and  negotiated parking  on neighboring businesses lots. Paid cash for two master degrees and modest condo. Declared 60 to 80k annually.  

Last known was valeting at indian casinos in California.  

I personally bartended for a short time but tips would not support me. Bell Hop in Palm Springs pays better. :)  (Late 1960)

 

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Interestingly, at least to me, when I am leaving a tip where I am not familiar with the practices of the business, I use a card.  If I know the business (I will ask employees!) gives tips to each person as given, then I might use cash.  My idea is I want to make certain the tip get to the person who actually helped me.  If they want top tip out to back of house, that is their business.

For those who are self employed, such as the person who does my DW and DD's hair, I generally pay cash, as I know what CC fees are.  It is not my job to worry about their finances, but I can save them at least 3% in fees.  I don;t alter my tip, but they also know I am paying cash on purpose to add 3% to their income from me.

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17 minutes ago, Medlin Software said:

Interestingly, at least to me, when I am leaving a tip where I am not familiar with the practices of the business, I use a card.  If I know the business (I will ask employees!) gives tips to each person as given, then I might use cash.  My idea is I want to make certain the tip get to the person who actually helped me.  If they want top tip out to back of house, that is their business.

For those who are self employed, such as the person who does my DW and DD's hair, I generally pay cash, as I know what CC fees are.  It is not my job to worry about their finances, but I can save them at least 3% in fees.  I don;t alter my tip, but they also know I am paying cash on purpose to add 3% to their income from me.

I'm not sure I understand your reasoning, and I would like to.  I do it the opposite way but for the same reason.  I have assumed that if I leave cash, the waitress or the person that I hand the cash to will get the tip.  If I put the amount on the card, I don't know if the business will give the funds to the person that waited on me or put them in group fund that gets split among everyone working that night (or even, worse case scenario, pocket the money for the business and not give the staff anything.)  Tips are almost the only time that I do use cash anymore. 

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