If i get paid all year long by my employer in cash, they don't take taxes out on me. Then at the end of the year my employer gives me a hand written w2, do I have to file taxes? I mean he is only doing it to use as a business expense and I am going to end up having to pay in a lot of money. Is there any way I can get by without having to file? Someone please explain.
2007-04-05 13:21:17 · 20 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Yes you do, and that answer would be the same even if he HADN't given you the W-2. But this will be real interesting - if he didn't take out taxes all year, what does the W-2 show? Nothing withheld for social security and medicare? He's in serious trouble if he didn't withhold that, and pay the matching amounts. That's if what you got is really a W-2 and not a 1099 - with a 1099, the company doesn't withhold taxes or pay the social security match, you're responsible for that.
In any case, you need to file. You're going to owe a lot of money - well, if you'd been paying taxes all year, then you wouldn't owe so much. You tried to cheat and evade taxes - then your employer turned around and stopped you. He's only using it as a business expense? Well, sure, why else would he pay you - it IS a business expense.
A handwritten W-2 is legal - they don't have to be typewritten or computer-generated. And this amount has been reported to the IRS with your social security number, so if you don't file a return, the IRS will send you a bill plus interest and penalties.
2007-04-05 14:53:00 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
If your employer pays you without withholding taxes, and notifies the IRS at the end of the year via W2 (he gives you a copy of the W2 he gives the IRS) then, yes, you have to pay taxes.
And here's where it's gonna hurt: the taxes he should have taken all year long amount to 15 - 20% of your year's earnings. So, if you made twenty thousand dollars last year, you could owe three thousand dollars or more.
I'd have a conversation with the IRS and come clean about your boss's taxation habits.
2007-04-05 13:30:32 · answer #2 · answered by Stuart 7 · 1⤊ 0⤋
Yes, you have to file taxes. If he's giving you a W2 w/ your income on it, then he's also turning over to the IRS a copy of that same W2 - as he's required to by law. They will know that you had an income and they will know that they haven't gotten their share of it. They don't like that. They'll get their money eventually, the only question is whether it's after they file charges and add on penalties & interest or up front w/ a tax return from you.
2007-04-05 13:28:38 · answer #3 · answered by UNITool 6 · 0⤊ 0⤋
You have no choice but to file (it does not matter if the W2 is handwritten), unless your income is really low. It doesn't sound right to me that your employer handles his employees so poorly by paying in cash, and not taking out taxes. I'd get a new proper job so you don't get in trouble with the IRS.
2007-04-05 13:25:40 · answer #4 · answered by Nanneke 4 · 1⤊ 0⤋
Wow...everything about this is wrong. Starting with you being paid "under the table" so your employer does not have report taxes to you employer then issuing a W2 for taxes that were never withheld for work you were never taxed on!
This is bad.... Seek a professional tax advisor - oh and new employer too.
Good Luck
2007-04-05 13:27:35 · answer #5 · answered by ? 5 · 1⤊ 0⤋
Yes you have to file. Your employer is legally obligated to file W-2s, which means the IRS knows what you made last year.
Even if they don't catch it right away, when they do you'll get hit with penalties and interest on top of the originall amount owed.
Needless to say, if you knew your employer wasn't taking out taxes, you should have set aside approximately %30 of each paycheck.
2007-04-05 13:29:38 · answer #6 · answered by linkin 2 · 0⤊ 0⤋
he probably gave you a 1099 Form showing you were contract labor. He's smart because YOU have to pay your share AND his!!
You don't necessarily have to pay taxes, it depends on how much you earned. However you MUST file a return. If you don't, and the IRS comes after you, and you owe taxes, you have to pay your taxes, interest, penalties and possibly go to jail.
If you refuse to pay they can start attaching property like bank accounts, cars, houses, or any other asset (you i-pod) and STILL put you in jail.
If you got paid, you have to file taxes, even if you don't owe any. The IRS wants your info.
Good luck with that.
2007-04-05 13:26:20 · answer #7 · answered by Sarge1572 5 · 0⤊ 0⤋
If he is reporting it as a business expense then you will have to file its better to do it now before they figure out that you owe them a ton and have to deal with all the legal stuff that goes with it. That was shady on his behalf to not tell you that he was claiming you as a business expense, and to pay you in cash is shady as well...
2007-04-05 13:24:34 · answer #8 · answered by Will's<3er 2 · 0⤊ 0⤋
I wouldn't do it because you have no actually proof that income was given to you. Your employer is responsible for sending tax info in order for you to get a real W2.
2007-04-05 13:29:01 · answer #9 · answered by brinkmont 5 · 0⤊ 1⤋
yes, any income is taxable if you made over a certain amt call the IRS 800 # or go to IRS office with the w-2 and any other reocrd you have. This is not the place for tax advice.
2007-04-05 13:29:57 · answer #10 · answered by Anonymous · 0⤊ 0⤋