Posted on 02/19/2024 7:34:39 AM PST by Candor7
The dark cloud of a good deed hangs over a Michigan restaurant, because days after it made the news over a massive tip left by a customer, the server who received the tip was fired.
The saga began on Feb. 5, when a man had $32.43 worth of breakfast at the Mason Jar Café in Benton Harbor, Michigan. He left a $10,000 tip, according to the Detroit Free Press.
(Excerpt) Read more at westernjournal.com ...
In reading the story, there appears to be much more to it than what’s on the surface. There’s a good chance management had due cause to can her.
The story seems simple enough. She got a big tip and the restaurant had to pay taxes on that tip, so they fired her.
There’s almost always a lot more to these stories than is suggested.
So why does the business pay the tax?
Yet they give no reason for firing her except that the tip is “part of the story”?? Why not tell us why then?
She shouldn’t have posted about it on social media! Diving further into this, it seems that there was a dispute over the taxes. That for whatever reason, the restaurant had to pay the taxes on it, rather than coming from her tip directly.
Either way, it seems like there is more to this than restaurant bad, employee good - as is presented here.
“When something this big happens, people act certain ways and if there’s issues with somebody to begin with, this can cause it to be even worse,” Cousins said. “And then it all just kind of blows up.”
That’s my question.
Whomever earns the money should pay the tax.
Free money NEVER does anyone any good. Invest in people, choose wisely.
This may have something to do with Michigan’s tip credit...
https://www.nolo.com/legal-encyclopedia/michigan-laws-tipped-employees.html
So why does the business pay the tax?
~~~
Because it was a credit card transaction, so the funds hit their bank account, and it’s taxable revenue.
What i don’t understand is why the restaurant had to pay her the full amount. The restaurant received the funds into their merchant account. They could have withheld tax.
That's because double taxation is the American Way. /s
Well, that convinces me. Next time I tip $10,000 I'll use cash.
Agreed.
Regards,
She doesnt need the job
Get some training with that $10,000 and get a better paying job...
They fired her because of the actions of one of their customers.
Something doesn't make sense here.
As for the business paying the taxes, the IRS requires that businesses withhold income tax on tips just as if they were wages. I don't know if businesses are also required to pay the employer half of Social Security taxes on tips, but that may be the case and the business asked that the waitress reimburse them for their half of the SS taxes on $10,000.
Otherwise, the business would have to pay Social Security taxes on 'wages' (tips) without a corresponding income stream.
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