I am a server in Texas and I have a question for anyone who knows the answer. Google hasn't been much help. Is it legal for me to have to pay taxes on tips that I have to tip out to cooks?
Example: I work at a restaurant that has hibachi grills and when I am a server for those tables there is an automatic 18% gratuity. At the end of my shift I get cash for all of my tips I made but since it's documented on my revenues I pay taxes on those tips. That's not an issue. The issue is on any table I severed that has a grill I have to give 40% of any tip I make to the cook, including any amount the table tips extra on top of the 18% for my good service. I don't mind tip sharing because our cook puts on a good show. My problem is since it it on my revenue report I pay taxes for the cash I have to give him. This ranges between $50 to $200 a night.
This is my first job as a server so I don't know the law on this particular situation and I'm finding my self getting increasingly annoyed that next year I'm going to have to claim a substantial amount of income that I had to give away. Again, I have no problem with tip sharing in this situation I just don't think I should pay the taxes for him and I'm wondering if this is even legal. Any info is helpful. Thanks.