There is a story making it’s way around about a waitress that received a $10,000 tip and what a wonderful gesture it was. No doubt about it, except that because of the way it was given, the waitress is going to have to pay taxes to the IRS for it.
Granted, if the person giving the money had done so as a gift where no taxes would need to be taken out, it would not have generated the publicity it has, but by making the decision to give the money as a tip rather than as a gift and assuming a 15% tax rate, the decision will cost the waitress $1500 that instead goes to the government. For a student strggling to pay for school, that’s a lot of money that could have helped.
I don’t want to take anything away from the generosity that the family that gave the tip showed. It was a fantastic gesture that should praised, but it shows that if you want to do something good, it’s worthwhile to think through the financial consequences of the way you do it or else a large chunk of money will needlessly end up going to the government instead of the person you intended to benefit from it…
Get Your FREE Book Now
Enter your name and email address to get your FREE copy of "Guide to Shopping at Costco."