If I am paid cash, How my taxes will be affected?

Question

If I am paid cash, How my taxes will be affected?

Answer 1

if you mean cash under the table - they may give you a 1099, then you would have to pay your own FICA taxes that the employer should be paying plus the income taxes and I guarantee they won't be paying into the unemployment system for you, so if they lay you off, you won;t be able to collect unemployment benefits, and I'm sure you aren't getting any kind of benefits either

Answer 2

I have seen this before.  It really is a shame.  Unless you made a very low income and have a lot of deductions, you are going to owe a substantial amount of income tax.  The IRS is going to audit the business and determine for themselves what you made.  You are then in the position of guilty until proven innocent.  If you work in a restaurant, it is even worse.  The IRS audits the restaurant;  takes the total revenue;  divides by the number of employees and says "this is your allocated tips.  You may say "not fair.  I didn't work when it was busy".   Again:  you have to prove it.   If the IRS shuts the guy down, the

IRS will type up a W-2 for you;  fill in allocated tips for you, not your employer on a W-2.  And you can't deduct your business related expenses because you were attempting to tell the IRS that you were earning no money.   If you've been doing this for a while, get out now.   You can't do any thing about the past years;  you have  a whopper of an income tax bill awaiting you.  However, you should get out now and you could launch a business, take the large Section 179 deduction.  All that you can do is to attempt to blunt the impact of an awful tax bill.  

If your employer refuses to take out tax, you should send in estimated tax on an IRS Form 1040-ES.  You can do it electronically with the IRS.  The IRS will allow you to slide for a quarter, but no more.   For 2007, 2006, 2005 - however far back this mess goes:  you can ask the IRS to forgive the penalty, but there's no chance.  I think I saw one time where they forgave the interest, but it was not much interest.  I've never seen the Agency forgive the penalty.  Ask your employer to give you your W-2.  

If she refuses, ask if they are going to mail a 1099-MISC that has box 7 - Non-employee income - filled in.  That means you have to fill out a Schedule C.   Go through your checkbook, your credit card bills, your total mileage for 2007, 2006 - however far back this mess goes - the miles you drove while you were on the job; the equipment you had to buy, etc.  What I am saying is that you need to obtain all the legal deductions you can.   Begin saving ALL your receipts and keep a diary of your expenses.  If you don't know the mileage you drove, look at the State inspection receipts.  The mileage is there and you can interpolate.   Think of work related cell phone calls, look at your bills, etc.  

If you are sent a 1099-MISC with Box 7 filled in, you have to pay what the IRS calls Self-Employment tax.  You have to fill out a Schedule C and Schedule SE as well as Form 1040 and eFile or mail along with the other income tax forms.  This is actually social security tax and none of us can get out of that tax either - unless you register as a member of a "religious order - as the IRS calls it.   If you live in one of the 43 States that have income tax, you may have to pay State income tax, also.  

I know all this because I had clients in this very same situation.  Don't give up.  Get something to hold your receipts:  a shoe box or anything to start.  As the years go by, you will become better and better organized.  Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired. When you file your income tax return, you can attach Form 8919 Uncollected Social Security and Medicare Tax on Wages and only pay the employee's half of social security.  You will still have to cough up all the income tax. IRS and the states are stepping up enforcement as there is severe abuse.  These people are trying to get out of paying Workers Compensation premiums, SUTA tax, FUTA tax and their portion of the FICA tax.  Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). The payroll taxes are sometimes even called "FICA taxes".  An employer has to insure employees against on the job injury by means of Workers Compensation insurance in every single state if he has more than two employees in most States.

The IRS is aware of this severe and growing problem and began cracking down on it hard about 3 years ago.

Answer 3

If you earn over $400 in any one year from any source, you need to report it to the IRS at tax time.  If you expect you'll be making more than that, you can ask for a W-4 form or to be issued a 1099 at the end of the year.  If whoever you're getting paid from doesn't do either of those, you are still responsible for reporting whatever income you earn.  If you expect to make a significant amount, you might wish to pay quarterly taxes.  Good luck!

Answer 4

You will have to pay them.

If you are payed cash, your taxes are not being deducted.