OK.
Now I've gotten the information that I need. I'm trying to find a legal way for Reardon to tax his employees at 20% without having them fill out tax papers. This is what I've learned so far.
The 8% figure comes from the law that says a server needs to declare at least 8% of their total sales. They SHOULD declare 100% of their tips. BUT...the onus is on the server to declare their income because it is illegal for the restaurant to change the declared taxes that a server reports. The restaurant may have it's own policy regarding the declarations, but once again, from the IRS point of view, the onus is on the employee, not the owner of the restaurant. The owner will not be audited if there is a discrepancy, the server will be.
The only way that Reardon could legally tax his employees at 20% without tax paperwork is if he is not listing them as employees but rather as independent contractors. If that's what he is doing, he saves a LOT of money because he doesn't have to pay certain insurances or he can pay less in insurance and payroll taxes. He may not have to pay worker's comp at all. So, if he is doing that, he needs to give the employees a form at the end of the year to on which the "contractor" can declare tips and other income. There is NO law that allows a restaurant owner to tax employees at 20% of their total sales.
So, now I see why Reardon would do what he's been doing. There is a legal explanation, but it is not customary in this area and it serves to benefit him, not the servers. Now, I don't know if that's what Reardon is doing, but it is one explanation.
Of course, none of that justifies calling employees "fucking idiots". It doesn't explain away fanny pats and it doesn't explain why he threatens his employees with that stupid, "There are 100 people standing in line for your job so if you don't like it, get out."
OK then.
Now I've gotten the information that I need. I'm trying to find a legal way for Reardon to tax his employees at 20% without having them fill out tax papers. This is what I've learned so far.
The 8% figure comes from the law that says a server needs to declare at least 8% of their total sales. They SHOULD declare 100% of their tips. BUT...the onus is on the server to declare their income because it is illegal for the restaurant to change the declared taxes that a server reports. The restaurant may have it's own policy regarding the declarations, but once again, from the IRS point of view, the onus is on the employee, not the owner of the restaurant. The owner will not be audited if there is a discrepancy, the server will be.
The only way that Reardon could legally tax his employees at 20% without tax paperwork is if he is not listing them as employees but rather as independent contractors. If that's what he is doing, he saves a LOT of money because he doesn't have to pay certain insurances or he can pay less in insurance and payroll taxes. He may not have to pay worker's comp at all. So, if he is doing that, he needs to give the employees a form at the end of the year to on which the "contractor" can declare tips and other income. There is NO law that allows a restaurant owner to tax employees at 20% of their total sales.
So, now I see why Reardon would do what he's been doing. There is a legal explanation, but it is not customary in this area and it serves to benefit him, not the servers. Now, I don't know if that's what Reardon is doing, but it is one explanation.
Of course, none of that justifies calling employees "fucking idiots". It doesn't explain away fanny pats and it doesn't explain why he threatens his employees with that stupid, "There are 100 people standing in line for your job so if you don't like it, get out."
OK then.
posted by Meg Kelso | 5:50 AM
0 Comments:
Post a Comment
<< Home