I work in a night club and was curious, Government is really after us now. I buy a lot of people drinks out of my tips. Can I save receipts and use them? Some say yes some say no??

unless it is a cost of doing business (a valid one, that is) the answer is no. If it were a business meeting or you owned the night club, then maybe. The simple fact that you are buying them a drink because you just want to be nice isn't good enough for Uncle Sam.

Thanks for the reply. But this sucks, so much for trying to be a nice guy..

Be careful of liquor regulations!

I'm not well versed in liquor control laws, but I know that profit from liquor sales are closely regulated. For example, if you're a distributor of beer and wine, you're severely limited in your advertising and promotions. You're not allowed to offer more than a certain percentage discounted from the retail price, and I believe it's actually illegal to give free samples. (Whether and how these regulations apply to night clubs, I don't know, but I wouldn't be surprised if there were similar restrictions.)

To find out more, you can contact an office of Tobacco, Alcohol and Firearms.

As for tax deductions, I doubt that you'll be able to find anything. I don't believe that you need to be in business to get a deduction like this. If you can show that the buying of drinks is necessary to generating your income, then it may be considered a cost of your employment, the same as buying a required uniform or buying a lunch for a potential client (sales reps get this one if they don't have an expense account). This type of deduction is claimed as an itemized deduction.

Buying drinks for people? I'll have to see just how far this is stretching the "good nature" of the IRS. (I use that phrase generously!)

If you don't already itemize deductions, you won't get anything whether it's legit or not, unless you're willing to give up many thousands of $$$ in tips!

Ooops! That should be "Alcohol, Tobacco and Firearms" (ATF).

I didn't find anything specific to your industry as far as using tips to buy drinks. I think you're out of luck, though, because your main source of income, wages, aren't affected by weather or not you buy drinks; only your gratuities would be affected.

I asked my wife and she said the same (she just finished training with H & R Block).

I think that there are two ways for you to deduct what portion of your tip income you use to buy customers drinks. First, if you receive a 1099 form at the end of each year, then you have to fill out a Schedule C as an independent contractor and so may list your drink-buying expenses as a miscellaneous expense of generating income, which is to say, more tips. Hence since there is the equal protection clause in the Fourteenth Amendment of the Constitution, even if you receive your wages on a W-2 form, instead of on a 1099 form, you, too, are entitled to deduct your drink-buying expenses as a miscellaneous expense of generating income, which is to say, more tips. As you probably get a W-2 form, I think that you should list your net tip income, not gross tip income (tip income before drink-buying expenses). Heck, the IRS is not interested in auditing someone whose tips run 20% below the norm of tips reported for similarly situated employees. This is not, of course, a rationale to list 20% less than your actual tip income, but we do know that with all the unscrupulous people out there, you probably have been reporting too much tip income for too long. Finally, if, indeed, your drink buying does generate more tips, we know that you will effectually be reporting only 10% lower tip income what with your tip income running above the tip income of those similarly situated and not as generous as you. P.S. Those who advised you to do the subtracting for the drinks know that you will never get caught, because your tip income reported will fall within an IRS acceptable range. Drink up, because it's Christmas!

Well I work in a small town and tips and not very good. But to top it off I work day shift and therefore I don't make alot. But there are some days I do not go home with any money. I have spent all of my tips back on my customers. The canadian government is cracking down on the service industry. IF they do not believe what you claim they are going through your employers books. They then total the sales and calculate credit cards. Tips shown minus 2% for non tippers. They them divide by employees and low and be hold this is what you have to pay. NOT FAIR.. What about money lost, wrong change given, paying for spillage??
We do not have any write offs. Or none to anyones knowledge that I know. What does one do?
Myself since I have worked in the service industry I have always claimed 10% gross. I know many, many people who have claimed nothing. A girl I work with knows a woman who was dinged 5000.00 Another of our bartenders works for a big chain and last year he too had to pay a few gran. Am I overly paranoid!
N

Nadca2: It was my mistake that I did not look to see that you live in Canada. Yet, from what you say--going home without any income--it seems that your customers need to buy you the drinks. Better, it does appear that you need to find a better job. Call some restaurants, because good help is hard to find. P.S. If these customers are truly your friends, then they will not mind continuing to know you once you work someplace else, someplace which pays you a salary and is not a volunteer job.

I do get paid for my job. It is just that I like to spend some of my tips on customers. Makes them feel appreciated. Government wants us to claim 100% of tips. But you are correct I should find a new job.. Hard in a small town though.
N2

I didn't look at your residence, either. Sorry about that.

Here's a website on Canadian taxes for individuals:

http://www.ccra-adrc.gc.ca/tax/individuals/menu-e.html

I cruised around, but I didn't see anything instructional on tip income. I won't pretend to be a Canadian tax guru, either, but it looks similar to our system.