How To pay taxes on a cash income (credit, charge, employment)

[Cth1086]

I have been working at a bar for about 4 years and the owners avoid paying taxes at all cost. With this being said i think that you can put together that i get paid under the table. I told them that i need some record of a job because i dont want to get screwed if someone comes asking questions.... well someone IS asking questions now because i am trying to buy a house but dont have enough proof of income. Im willing to pay the taxes on the money ive made i just dont know how to or if it is even possible. Surely the irs wont turn down money if i try to give it to them. Any sugestions?

[sunsprit]

You've got a handfull of issues to deal with.

1) Your employer needs to issue you a W-2 to reflect what they're paying you per hour, which also opens up the issues of Workman's Comp and Unemployment Insurance for which they are liable.

2) Your employer is also on the hook for payment of your FICA taxes, via their contribution matching your deductions.

3) It is customary in your trade to estimate the amount of tips you are expected to receive. The IRS can actually audit the books of your employer and make a determination as to how much tip income in cash you are receiving. Absent any other documentation, this is the amount that you will be required to declare and pay income taxes on. Sometimes you'll find that the IRS is a bit aggressive about your tip income, and sometimes not. But if your employer isn't keeping track from simple things like tips added on to CC charge tabs, or tracking the cash tips at the bar ... you could be liable for a lot of back taxes when the IRS walks in to assess the situation ... as will your employer.

You are clearly not an independent contractor working at a bar. Your employer has legal obligations to you and the IRS (and your state income tax dept, as well as employee protection) that must be addressed. Unless you can pay cash for your house, you'd better get your employer to pony up.

[sterlinggirl]

If you want to claim that income for the last 4 years, you're going to have to pay some penalties. Once you've given them some proof, the IRS may decide to investigate your boss and throw him in prison for a while.

Talk with a good tax attorney before you approach the IRS.

[golfgod]

Sterlingirl wrote;

Once you've given them some proof, the IRS may decide to investigate your boss and throw him in prison for a while.

And rightly so. Your employer has been SCREWING the rest of us for at least the last 4 years.

Talk with a good tax attorney before you approach the IRS.

Best advice ANYONE has given on C-D this month. You already know that you're dealing with a SNAKE, who is willing to jack with the FEDERAL GOVERNMENT. Anyone willing to take on those with unlimited resources is more than willing to lie, cheat and steal to put the onus on YOU.

golfgod

[las vegas drunk]

Originally Posted by Cth1086

I have been working at a bar for about 4 years and the owners avoid paying taxes at all cost. With this being said i think that you can put together that i get paid under the table. I told them that i need some record of a job because i dont want to get screwed if someone comes asking questions.... well someone IS asking questions now because i am trying to buy a house but dont have enough proof of income. Im willing to pay the taxes on the money ive made i just dont know how to or if it is even possible. Surely the irs wont turn down money if i try to give it to them. Any sugestions?

As someone who has been audited by the IRS myself, You are surely making a mistake. Believe it or not, you could easily go to jail over this for tax evasion, as could your employer too. Your best option is to forget about buying a house unless you plan on looking for other employment. I assume you are either renting a house or apartment at the current time. I would continue doing so.

[Gandalara]

Originally Posted by Cth1086

I have been working at a bar for about 4 years and the owners avoid paying taxes at all cost. With this being said i think that you can put together that i get paid under the table. I told them that i need some record of a job because i dont want to get screwed if someone comes asking questions.... well someone IS asking questions now because i am trying to buy a house but dont have enough proof of income. Im willing to pay the taxes on the money ive made i just dont know how to or if it is even possible. Surely the irs wont turn down money if i try to give it to them. Any sugestions?

You need 40 quarters to qualify for social security.

In addition to your income tax problems, you have effectively lost 4 years credit towards your social security. That's 16 quarters.