How do you file taxes when your employer pays you in cash?

Answer 1

You are not being treated as an employee for tax purposes in this case. Your employer is not withholding your Social Security and Medicare taxes, not paying his matching Social Security and Medicare, and not withholding your federal and state income tax.

This may be proper or not, depending on your work arrangement.

You will file Schedule C showing all cash that you received. From this you subtract your expenses. You will then fill out Schedule SE to figure your Social Security and Medicare taxes (self-employment taxes) on the net income.

It is possible to get Earned Income Credit as a self-employed person, but it will be less than if you were employed because you have to pay self-employment taxes.

Answer 2

Your employer is required by law to give you a W-2 at the end of the year. If he doesn't, he is violating the law by paying you under the table and probably also not paying the payroll taxes required by law.

Answer 3

unless he gives you a w2 at the end of the year he is not claiming you as a worker and paying any benifits/ taxes.

ask him, else you have to save around 20 to 30 percent of your income and pay the IRS at the end of the year as self employed.

Answer 4

You don't. This is what is known as "getting paid under the table" and your employer, who pays you cash, doesn't report the fact that you exist working for him to the IRS. That way he doesn't have to deal with any paperwork regarding you and any applicable taxes.

Answer 5

ninasgramma is correct. Laurie's advice is that you commit tax fraud - real bad advice.