DETROIT – IRS changes that take effect on New Year's Day may lead to the end of automatic tips at restaurants.
Automatic tips at restaurants, those are generally 18% tips for larger parties, are now viewed as a "service charge." That's because customers are "required" to pay it, which in turn makes it a taxable wage for servers.
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The IRS actually made the change in 2012, but postponed it until this year.
The Texas Roadhouse has already said that automatic tips will be gone starting in 2014.