A friend was working for someone being paid cash "under the table". He never signed any paperwork and it was always a cash payment. Basically, there is no documentation that he has worked for this company. If the company tries to push a 1099 at him, what should he do? If he does the 1099, then he ends up making as much as he would have doing fast food, with harder work and longer hours. Should he ask the guy to pay for 15% of the tax? He doesn't want to ruin a friendship over this, but cannot afford to pay out 30% of taxes when it was never discussed, otherwise he would have asked for a higher wage.Answer Question
Asked by Anonymous at 11:32 PM on Oct. 10, 2010 in Money & Work
Answer by Bluesdawg02 at 11:38 PM on Oct. 10, 2010
If that company is ever audited and they want to know where $35,000 (not sure what your friend makes, so I am just putting a number out there) went, don't assume that the owner will stay quiet about it. Your friend may not get found out this year or next year, but eventually it will come back to bite him in the ass. Tell your friend to do the right thing and claim his earnings as income.
Answer by JeremysMom at 11:44 PM on Oct. 10, 2010
Answer by sherribeare at 1:23 AM on Oct. 11, 2010
Answer by Happymom2-2 at 8:58 AM on Oct. 11, 2010
Ok WRONG...There is no documentation on EITHER party, thereby NO PROOF..if saying it ever went to court it is One word against the other...THere is NO paper trail so, the company can say they were paying the Pope the whole time...and it can easily be denied.
Unless, her friend is hiding money in his shoeboxes, there is proof. If the company is under audit and they tell the IRS that they paid so and so x amount of money, they will look into that person's personal finances and wonder "Hmm, how can he afford this car payment if he didn't claim any income last year, or the year before, etc". Yes, they could reverse (aka lie), but why do that. When they can tell the truth from the beginning and not have to keep up with what lie they told.
Answer by JeremysMom at 9:20 AM on Oct. 11, 2010
Answer by Happymom2-2 at 1:45 PM on Oct. 11, 2010