Senate unanimously approves bill to create tax deduction for cash tips

[jmowreader]

8. Only applies to cash tips?

Most people these days tip by adding the tip to their credit or debit card bill.

And seriously guys, if this is going to be a Schedule A deduction then it's basically a nothingburger. A single parent gets a $20,900 standard deduction and a single person without dependents gets a $14,600 standard deduction. How many people work in the kind of restaurants where the patrons tip that heavily?

Let's throw some numbers in here. We will assume that our tipped employee has a child (so, head of household status) and works five days a week, 50 weeks per year, or 250 work days. If you divide $20,900 by 250 days the employee has to average $83.60 in tips every day to break even by itemizing if she has no other deductible expenses. The employee ALSO has to earn more than $20,900 in both wages and tips to push her income into taxable territory...so if she's making only $20,000 per year she wasn't paying taxes in the first place.