Results 1 to 9 of 9

Thread: paid in cash

  1. #1

    Default paid in cash

    I recently started my own business but it's going rather slowly. I do odd jobs for my father and he insists on paying me in cash. My wife and I are in the process of an adoption and need to claim the money as income. I want to do the right thing and pay taxes but my father doesn't want anyone to know he is giving me this money. My question is, can I claim what my father gives me as self employment income without having to implicate him in any way? If so how would I go about this?

  2. #2
    Registered User
    Array
    Steve B's Avatar

    Join Date
    Aug 2008
    Location
    Louisville Kentucky
    Posts
    2,024

    Default

    I don't see the problem. Keep track of the cash you get and report it as income on your books. I don't think there necessarily has to have a name associated with it - but, the chances of an audit these days are pretty close to zero even if your records show the name of your customer.

    By the way, congratulations on doing the right thing despite what even your own father wants you to do! I often have people pay me in cash and ask/expect a discount. I've never understood their position. For one thing, I report every dollar I earn - so there is no benefit to me anyway. But, even if I chose to hide money from the gov't. - why in the world would I give them a discount if I'M the one risking being caught and penalized?
    Steve B

  3. #3
    Registered User
    Array
    Join Date
    Dec 2010
    Location
    Detroit, Michigan
    Posts
    97

    Default

    I get that too. Like it matters to me if I deposit cash vs. a check.

    The only time I see cash should get a discount, is if it's in lieu of financing/extending credit.

  4. #4
    Mr. Tax Man
    Array
    Join Date
    Aug 2008
    Location
    Rhode Island
    Posts
    1,336

    Default

    Cash or check doesn't matter -- it'd all be income.

    Do you think that all the sales the local convenience store makes in cash isn't income?
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

  5. #5
    Registered User
    Array
    jamesray50's Avatar

    Join Date
    Nov 2010
    Location
    Missouri
    Posts
    770

    Default

    Hi Elijah, congratulations on reporting all your income. And good luck with the adoption. Me and my two sisters and brother were adopted.

  6. #6
    Web Consultant
    Array
    Join Date
    Aug 2008
    Location
    Las Vegas
    Posts
    9,842
    Blog Entries
    1

    Default

    You are a good man. After years of making mostly cash as a Bartender and Limo driver, it's tough for me to remember not to just pocket any cash payments. I normally only get them from local clients anyway and up until now those have been mostly escort services that are used to dealing in all cash.

  7. #7
    Registered User
    Array
    Join Date
    Dec 2010
    Location
    Detroit, Michigan
    Posts
    97

    Default

    Bartenders, servers, valets are good examples of people who just instinctively 'pocket' the cash and move on. Because that's all it is... cash.

    As an owner, it's information. We are always looking through a microscope at our business performance. So it's more important to see the actual results of our efforts, than to save a couple bucks on taxes. IMO

  8. #8
    Registered User
    Array
    Join Date
    Mar 2011
    Location
    New Orleans
    Posts
    3

    Default

    Question here regarding cash sales of services rendered...... A friend whom I just found out owns his own business, recently told me that as long as the sale or service if paid in cash is under $1,000... the IRS isn't bothered with a paper trail.

    can someone put some truth to that?
    David G Duplessis License #: E-4222
    NICET Level 2/Fire Alarm, Fire Extinguisher, Pre- Engineering Suppression,and Engineering Suppression endorsements

  9. #9

    Default

    Whether or not you are paid in cash, the IRS expects you to maintain adequate records. Period.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •