Claiming 'tips' during tax time?

[Locke]

Originally Posted by Bean

My coworker's kid tried to get financing for a home and got shut down as the papertrail of earnings showed far less than what he pulled in.

Same thing happens if a server hurts themself at work and they try to prove their employment earnings for WCB. Can't prove anything if you don't have proof, despite popular belief and common sense.

Which is actually reasonable compared to when banks were lending out obscene amounts of money so long as you showed up with a smile. Hence 2008.

[GP_Matt]

Originally Posted by Locke

Its a rational argument. Why else would you have two separate minimum wages, one for the general working public and one for Liquor Servers?

I imagine because the government is factoring in unclaimed tips and so they earn a lower wage.

http://www.cbc.ca/news/canada/edmont...e-alberta.html

There are two separate wages because liquor servers make some of their income from tips. The fact that they might not claim the tips is irrelevant. Their $9.05 minimum wage isn't $9.05 less the claimed tips with the difference made up with unclaimed tips.

[Bill Bumface]

I know a guy that ran a business on Centre street, lots of cash sales. He didn't claim a lot of them. When Centre street was closed for bridge refurbishment, lots of businesses got hurt pretty bad, but were paid to compensate for lost sales, based on previous reported revenues. Guess who didn't qualify because past revenues were so low on paper? Out of business we go....

[polak]

Wow what a dick.

Thats rich coming from a Calgarian, where most of the workforce is in an industry that hires office workers as contracters so they can pay as little tax as possible.

I wonder if he ever paid anyone under the table to do any sort house or car work.

Who cares if they claim their tip. Frankly I give them credit for finding work where they can avoid paying taxes. Just like any business owner. It is super risky though. I wouldn't avoid claiming tips that have a paper trail, which is almost all of them.

You know who skip out on paying taxes? Delivery drivers of any sort. Most places don't even list them as employees. It's all under the table.

[Zevo]

I bartended for years. I only claimed a small portion of my tips. Only enough to hopefully keep me off Revenue Canadas radar...which it did.

Why would I declare income that I can't use to get a mortgage or a loan of any kind. Seemed like a fair tradeoff.

[Cecil Terwilliger]

Originally Posted by Zevo

I bartended for years. I only claimed a small portion of my tips. Only enough to hopefully keep me off Revenue Canadas radar...which it did.

Why would I declare income that I can't use to get a mortgage or a loan of any kind. Seemed like a fair tradeoff.

If your income stated on your tax returns/NOAs is shown to be consistant you should be able to use it as income for a loan/mortgage application.

Unless you're referring to not being able to use income that you don't claim but I think the answer to that should be obvious.

[albertGQ]

Originally Posted by Zevo

I bartended for years. I only claimed a small portion of my tips. Only enough to hopefully keep me off Revenue Canadas radar...which it did.

Why would I declare income that I can't use to get a mortgage or a loan of any kind. Seemed like a fair tradeoff.

Cecil is right. If you claim tips and have at least a two year history of it supported by your NOAs and T1G's, you will be able to use it for mortgage qualifying purposes

[Bill Bumface]

Originally Posted by albertGQ

Cecil is right. If you claim tips and have at least a two year history of it supported by your NOAs and T1G's, you will be able to use it for mortgage qualifying purposes

The reality is quite a bit different. I had 4 years of stable contracting work at the same client, full time for all 4 years, and it was still a be-atch getting my mortgage if I tried to go with anyone but the bank that held my business accounts.

[Cecil Terwilliger]

Originally Posted by hulkrogan

The reality is quite a bit different. I had 4 years of stable contracting work at the same client, full time for all 4 years, and it was still a be-atch getting my mortgage if I tried to go with anyone but the bank that held my business accounts.

Being self employed is a bit different. In that case business financials and personal tax returns and/or NOAs would likely be required.

It is true though, that anyone who doesn't have a steady salaried job will have a harder time securing financing.

[Zevo]

Originally Posted by Cecil Terwilliger

If your income stated on your tax returns/NOAs is shown to be consistant you should be able to use it as income for a loan/mortgage application.

Unless you're referring to not being able to use income that you don't claim but I think the answer to that should be obvious.

I think that's the case now, but when I was bartending(10+ yrs ago) you couldn't even claim tips you declare as it wasn't considered guaranteed income. I seem to remember them changing the rules though.

Not sure it would have changed anything but it's how I rationalized it at the time.

[Hugh Jahrmes]

My girlfriend works at a pretty nice restaurant in Red Deer and claims about 30 percent of her wage. 15 percent of total sales is a complete joke as there are a ton of #######s who can seemingly afford a $200 tab but only manage a $5 tip. Or the odd elderly (not singling them out just always seems to be the case from her stories) couple or group who have a$350 table and accidentally enter $0.35 on the machine. Add the fact that tipping out to the kitchen, bartenders etc is common practice and 15 is definitely not the norm.

[Hugh Jahrmes]

..double post

[albertGQ]

If she can't make 15% on average than she's probably not a good server.

[Kybosh]

In addition to servers, I've seen many a tradesguy get their income garnished by CRA due to them never claiming the correct amount. Hell, I've seen guys never claim a cent but buy brand new trucks and other toys. The CRA is watching.

[Bertuzzied]

Originally Posted by albertGQ

If she can't make 15% on average than she's probably not a good server.

haha what a dick statement.
yeah because everyone is not a cheap ass in Red Deer. I'd like to see you get 15% from my inlaws if you served them.

[albertGQ]

Originally Posted by Bertuzzied

haha what a dick statement.
yeah because everyone is not a cheap ass in Red Deer. I'd like to see you get 15% from my inlaws if you served them.

You should be able to make 15% on average. Yes, you'll have some cheap tables but you'll also have generous ones. Do it all balances out.

I work with a server who constantly complains because at the end of his shift he always makes only 10%. He doesn't know why but he's the worse server at our restaurant. He's the common denominator. He's the reason he only gets 10%. Not because of people being cheap.

[MillerTime GFG]

Originally Posted by First Lady

No, establishments simply pay out the portion of tip on CC transaction as cash to the employee.

What the heck was this guy expecting her to do; whip out her NOA as proof.

That's exactly why CC tips are harder to avoid claiming. If the restaurant/server does get audited, the restaurant will be required to show all of his/her debit and credit slips. Cash tips are easy to go without claiming, because there is no paper trail.

[Locke]

Originally Posted by Kybosh

In addition to servers, I've seen many a tradesguy get their income garnished by CRA due to them never claiming the correct amount. Hell, I've seen guys never claim a cent but buy brand new trucks and other toys. The CRA is watching.

Yeah, that kind of stuff is pretty commonplace, particularly in construction where labour is pretty fast and loose.

What a lot of people dont realize is that many employers in the construction industry want nothing to do with the hassle of someone whose wages are garnisheed. They'd typically rather hire someone else than put in the paperwork so it can affect their future employability.

Originally Posted by MillerTime GFG

That's exactly why CC tips are harder to avoid claiming. If the restaurant/server does get audited, the restaurant will be required to show all of his/her debit and credit slips. Cash tips are easy to go without claiming, because there is no paper trail.

And thats exactly why CRA is allowed to multiply whatever CC tips the server accrued by four.

[Flames Draft Watcher]

Originally Posted by albertGQ

You should be able to make 15% on average. Yes, you'll have some cheap tables but you'll also have generous ones. Do it all balances out.

I work with a server who constantly complains because at the end of his shift he always makes only 10%. He doesn't know why but he's the worse server at our restaurant. He's the common denominator. He's the reason he only gets 10%. Not because of people being cheap.

You're making a lot of assumptions. At certain restaurants the average will be 15%. At other restaurants which have a different clientele it is certainly possible that the average might be closer to 10% because on average you get a lot more cheap tippers at that type of restaurant.

The demographic of the average restaurant goer affects the tip. Higher end restaurants in more affluent areas are likely to have higher average tips. Restaurants in less affluent areas, family restaurants, etc are likely to have lower.

Don't assume everyone restaurant experiences the same level of tipping it is very clientele dependant. You server oil and gas people downtown? You'll probably average a decent tip with business lunches potentially tipping the least. You serve at a family restaurant in Forest Lawn? You'll run into some families, old ppl, etc who think they're being generous with 8%.

Don't assume everyone restaurant has the same clientele with the same tipping standards, that would be naive.

[albertGQ]

^^ I realize that. The poster said his GF serves at a high end restaurant in Red Deer.

If you're earning less tips than your co workers on a consistent basis, then look in the mirror.