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IRS Cutting Restaurant Wait Staff Tips

The bigger the party, the bigger the tip. As of January 1st, the 18-20% restaurants added to the tab of bigger parties, is now considered a service charge.
The IRS is taking a bite out of the restaurant business.
As of the first of the year, the 18-20% gratuity added on to the bill of parties of eight or more, will now act as a service charge.
The Federal Government is counting automatic gratuity as wages, not tips.
Ethan Machener, wait staff manager at Hicks and Mccarthy in Pittsford says it's a way for the state to claim more tax revenue, but it's not fair to the wait staff who rely on tips.
"You have another portion of your income that's suddenly liable to taxes it's harder on that person in an already stressful job," Ethan says.
Joyce Goldman eats out regularly and is against the change, saying it puts a strain on the service industry, where there's not a great profit margin to begin with.
"The tip should be added on to the bill to make sure the server is getting their fair share," Joyce explains.
Machener says for some, this is a career, larger parties take more time, energy and effort.
They want to be compensated for their hard work.
Ethan tells News 8, "It sometimes places an unnecessary burden on the server. A lot of effort will go into parties of that size and by putting a charge on that is making sure they're properly accommodated for their service."
All tips now, are voluntary.

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