Traditional tips have gone up over the years from 15 percent to 20 percent, even higher. But how much of that "extra" income is actually reported to the IRS by the servers you're tipping?
That's the thing, no one actually knows.
According to the Atlantic, the IRS says that as much as 40 percent of tips are not reported, or about $11 billion untaxed income. But why? The magazine found it is hard to track when patrons use cash instead of a credit card to pay the tip. Servers are required to keep track and report the figure themselves.
When looking at exactly how much of a restaurant's employee's income is tipped-based, payscale.com reported that front-of-the-house employees like bartenders and servers are tipped more than chefs or cooks, up to almost 70 percent for waiters and waitresses versus 10 percent or less for cooks and chefs.
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