Things to Consider for Holiday Tipping

Show your gratitude to those who help you all year – but keep these “tips” in mind.

1. Create a cheat sheet.
Start with people who work most closely with you or your family. For many who you see on a regular basis—a weekend babysitter, cleaning person, hairstylist, massage therapist or personal trainer, for example—the cost of one session or visit is a good amount to consider. About a week’s pay and perhaps a small gift from your child is appropriate for a nanny. The newspaper deliverer and trash and recycling collectors (if they are allowed to accept tips) should get around $10 to $30 each. If you live in a building with a doorman, tip him at least $15. It’s a very good idea to deliver your tip with a handwritten note that specifies what you appreciate about the person and her services.

2. Use discretion.
If someone has worked with you for many years or has provided exemplary service, you may want to increase the amount. And you could cut it for someone you tip throughout the year or whose services haven’t been notable. Where you live also makes a difference: Tips in big cities tend to be higher than in rural areas. You can get a good benchmark by asking friends and others you know. But if a neighbor tells you that she’s tipping her handyman twice as much as you can afford, you don’t have to match it.

3. Keep it timely.
Try to tip before the holidays are over. Better still (but too late for this year), tipping early in the season—say, near Thanksgiving—gives your recipients a chance to use the money for gifts or other expenses that come up at the end of the year. Delivering the tip in person is ideal, but for hard-to-catch people, such as your newspaper carrier, try to track down an address where you can mail a card and a check (and some may leave you a pre-addressed envelope). You could also leave a note at your door asking when you might be able to connect.

4. Consider options besides money.
A more personal (or less expensive) gift of homemade crafts or food, chocolates, and wine are go-to options (but watch for dietary restrictions). Monogrammed handkerchiefs or notepads show that you put some time and thought into your gift. A latte drinker might love a gift card to his or her favorite coffee shop. And if tips or gifts don’t fit into your budget, write thank-you notes. Consider sending a letter to, say, your cleaning person’s supervisor commending her work. Remember, a gift or a tip is not an obligation – It’s a gesture of kindness and good cheer during the holidays.

5. Not everyone accepts tips.
Don’t offer money to professionals such as accountants, lawyers and doctors, although a gift might be welcome. Postal carriers aren’t allowed to take cash or cash equivalents, such as checks or gift cards that can be exchanged for cash. You may, however, offer a gift worth less than $20. Employers of workers such as nursing-home attendants and trash collectors may prohibit employees from accepting tips or gifts – check the company’s policy.

6. Giving works both ways.
Giving a year-end tip or gift is primarily a way to say thank-you. But being generous can benefit you, too. Your hairdresser would never intentionally botch your dye job if you skip a holiday tip, but she might be more inclined to squeeze you in at the last minute if you treat her well. Everyone works better when they know they’re appreciated.

If you have any questions or issues about holiday tipping, what’s taxable and what isn’t, please feel free to contact me at larry@taxproblemsolver.com and I, or one of my Tax Problem Solver Team, will help you with your questions. We’re always here to help!