Meaning if I am earning $$ and the person paying me wants to claim it for the Dependent Care Flex Plan do I then have to also claim it?
2006-09-25 11:32:25 · 6 answers · asked by Laura A 1 in Business & Finance ➔ Taxes ➔ United States
According to the tax code you are supposed to claim ANY income. If you find $20 on the street or even if you steal $20 from someone. It's all income. The IRS doesn't care if you got it working, found it, or got from illegal activity...they want their cut. If someone wants to take the Dependant Care Flex Plan they will need your social security number and that will alert the IRS that you received that money.
2006-09-25 12:34:02 · answer #1 · answered by Eddie C 2 · 2⤊ 0⤋
You are "required" to claim any money that you make. Some don't and in particular people that take care of children seem not to report the income. If the person that is paying you claims the expense on their return they must provide your Social Security number and the IRS will check to see if you reported the income. You surely want to claim the income from anyone who has asked you for your Social Security number.
2006-09-25 18:53:38 · answer #2 · answered by ? 6 · 1⤊ 0⤋
Earning money "off the books" a.k.a. not reporting income to the IRS is a felony. If you are caught, you could pay significant fines and possibly spend some time in jail. You may get away with it for a period of time, but you never know when it is going to catch up with you. It may happen at a very inopportune time. What other felonies do you commit on a daily basis? I doubt you commit any, so why start here. Besides, you could be losing out on some credits like the Earned Income Credits and the Child Tax Credit....and you are definitely losing out on future Social Security payments. What do your customers think of you when you say, "Can you please pay me in cash and not report it to the IRS?" What if one of them gets into trouble and is asked to rat on someone else to get a more lenient sentence?
Do you know how they finally got Al Capone? Tax evasion.
2006-09-25 23:51:11 · answer #3 · answered by TaxMan 5 · 1⤊ 0⤋
If any info goes to the IRS, I would claim it. You should check with a tax professional. Are you a dependent of this person? I think the flex plan is only for child care, so both of you could be in trouble for fraud, I would check with a professional.
2006-09-25 18:46:54 · answer #4 · answered by Dawn C 3 · 0⤊ 0⤋
you are supposed to anyway. If you are wondering if you will have 40 quarters by the time you retire, then you should report it and pay the tax and FICA, so you can get Social Security at some point. I know of some people who won't get it.
2006-09-25 18:36:19 · answer #5 · answered by kurticus1024 7 · 0⤊ 0⤋
1.) If you receive $ from work, then you better report it.
2.) If someone else is going to report it for you, then you better report it.
3.) If you don't, you don't get Social Security credit.
4.) If you don't, you will eventually get caught and the fines will be excessive.
2006-09-25 21:41:59 · answer #6 · answered by TheSlayor 5 · 0⤊ 0⤋