I got a job as a private caregiver and it pays cash without tax. What does it imply?? I'm new in the country. 18yrs old and this is my second paying job. The first one took tax for 2 months. I wnat to know what it implies. Pls explain in details. Thanks.
2006-12-21 00:41:43 · 8 answers · asked by Cas 3 in Business & Finance ➔ Taxes ➔ United States
You will have to pay your taxes when you do your tax return by April 15.
You can pay housekeeper and private care givers in cash, see the IRS website. BUT, the person paying you must report what they have paid you. You must also PAY taxes on what you have earned.
Please pay those taxes, we don't want to have to foot the bill for your taxes.
2006-12-21 00:44:32 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You say that you are new in the country. If you are trying to get a green card, it probably won't help if you can't show that you have any income. If you are asked for copies of your returns and you never filed any because you were paid under the table, the answer from ICE better be a swift boot in the a*s as they toss you out of the country. On the other hand, if they ask you for your returns and you show that you have been dutifully paying quarterly estimated taxes and filing your returns on a timely basis, they may still hassle you, but at least they won't throw you out for felony tax evasion. As you are 18, you probably don't remember that in 1993, when Bill Clinton was first elected, he appointed two different women to be his attorney general, along with other women to serve in other posts. They were asked who cared for their kids while they were out being high-powered Wall Street attorneys. When they could not show that they had paid employment taxes for their caregivers, they were disqualified. It was called "Nannygate." You can check by searching that term. My point is that if your employer is questioned, she will throw you under the bus. Report the income.
2006-12-21 04:38:55 · answer #2 · answered by mattapan26 7 · 2⤊ 0⤋
darlin pretty much hits it on the head here. I work very closely with the payroll person at my job and we have to report the pay of our employees regularly for tax purposes. If the person for whom you are working does not report that you are their employee for their company tax purposes, then the government does not knwo that you are getting paid from that person. It is what is called "under the table." I got paid by a person like that for a while and never had any issues with the IRS. Besides, as long as your income is not all that great, you would get your taxes back anyway, so I would not worry about it. The only catch that would come up is if the employer reports that they are paying you to work for them. Then the employer has to give you a W-2 form so that you can file your taxes. If you never get a W-2 from them, then do not worry about it. If you do, just talk to them and see exactly how they reported to the IRS as far as your pay goes.
2006-12-21 00:52:56 · answer #3 · answered by The Shadow 4 · 0⤊ 1⤋
You are responsible for payingstate and federal income tax on the money. I believe you are also responsible for making your own social security deduction from that money.
I hope I'm over complicating this issue :-) It would be worth the investment to briefly hire an accountant for a consultation on the situation. You don't want to get caught up in not paying something that later comes back to bite you in the *** or hurts your credit rating. It is much more fun if you get to actually spend money on things you want instead of paying off back taxes with interest.
2006-12-21 00:55:25 · answer #4 · answered by krinkn 5 · 0⤊ 0⤋
it depends on if the person paying you is going to report to the irs that they are paying you. if not, you dont really have to claim it as income. if they are, you will be required to file a form, telling the govt how much you were paid, and then at the end of the year, you will have to pay the taxes that should have been taken out all year. if you arent sure, you need to ask that person how they are going to handle this. you could always take some money every week, put it in an account and not touch it until you have to pay it as taxes. most people paying in cash dont report it, but make sure. it can be very costly at the end of the year, if you have to pay.
good luck
2006-12-21 00:48:17 · answer #5 · answered by darlin12009 5 · 1⤊ 1⤋
If it's more than a little bit of money to recieve money even if it is in cash it is illegal.
It is called tax evasion, I kid you not.
someone I really look up to is in jail, because he paid employees in his ministry in cash, because he thought he shouldn't pay taxes because he ran a church, but employee taxes are not ever excluded from any type of affiliation-legally.
I strongly advise working out a normal pay system that can be taxed it is better for you in the long run, otherwise you will have no records of pay, and if you ever work somewhere else they will see that you havent paid taxes-this would not turn out well.
They are avoiding taxes, this is illegal, try to let them know, otherwise you could both end up in trouble.
It's not fair of them to do this.
I wish you luck.
2006-12-21 00:57:32 · answer #6 · answered by Anonymous · 2⤊ 0⤋
There is no "catch". It just means that you would have to pay more taxes in the end of the year instead getting a refund from taxes taken out of your pay each week or so. All the cash that you recived is your income. You get no witholdings.
2006-12-21 02:02:51 · answer #7 · answered by RoRo 3 · 0⤊ 0⤋
The catch is that you have to pay all of the taxes and the employer is not paying unemployment insurance nor workers compensation insurance if you are hurt on the job.
You would have to make quarterly payments of your taxes in order to avoid penalties for not having paid in your taxes timely. In addition to your federal income taxes you will have to pay 15.3% for self employment taxes. If you were being paid on a W-2 the employer would withhold half of this from your pay and he would have to pay the other half for your benefit.
In essence this causes your tax rate to increase by 7.65% and closes you off from collecting unemployment benefits if you lose your job or from collecting workers compensation benefits if you are hurt on the job.
2006-12-21 02:16:22 · answer #8 · answered by waggy_33 6 · 2⤊ 0⤋
Yeah I agree with the previous poster. Tax evasion is illegal. You need to get some professional help with this issue.
The other posters might be correct, that they never got caught with doing this, but that doesn't make it any more legal....
2006-12-21 01:35:32 · answer #9 · answered by Anonymous · 0⤊ 0⤋