Question
Would you pay taxes on off the books gigs like house cleaning, painting, etc.?
To supplement my income I do a number of short term cash jobs that are not taxed by a traditional employer. No one knows I am earning this money other than the person who hired and paid me in cash and myself. There is no notification given to the IRS or State or local government agencies. So when I do the taxes every year they ask me if I earned any misc income. Of course I do not put down money from odd jobs but some people might. (I am talking about maybe $1000 in income from these short term cash gigs) What would you do and what does most people do?
3 weeks ago - 7 answers
Best Answer
Chosen by Asker
Timothy Geithner does it all the time. If the IRS ever audits you, just invoke the Geithner Rule.
3 weeks ago
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Other Answers
Your best bet is to report it and pay what you owe. If you are ever caught in an audit, the money will be found. Penalties and interest are added, and the auditor may be able to extend the statute of limitations due to fraud (go back more than the regular 3 years). It is simply not worth the risk. At best, you are looking around $300 or so in additional taxes (income, soc sec, medicare). Why try?
by Lil_Dog- 3 weeks ago
Most people dont report these things. You should because if the IRS catches up to you there could be back taxes, penalties ,and possibly jail time. There is a very low number you will get caught but its still a risk. Its like downloading music some will get caught and hit hard; Most people wont get caught downloading though.
by Pb5678- 3 weeks ago
You are obligated to inform the IRS about your income. That said, it's pretty common knowledge that many people do work for cash and don't report it. The cash you're making is a fairly small amount, and it probably would go undetected by the IRS, even if you were audited. Keep in mind that if you have a CPA do your taxes, if you inform him/her about the income, they are obligated to report it. That kind of responsibility goes along with the profession. So if you don't want to report it, don't mention it to your CPA.
by The CPA Guy- 3 weeks ago
aw come on now--------------be ethical about it and report it on a Sch C and Sch SE(self employment tax)
by tro- 3 weeks ago
You are required to put down the money. You are required to enter it as business income or self-employment, not as misc income. If the amount exceeds $400, then you are required to pay self-employment tax, in addition to regular income tax.
by StephenWeinstein- 3 weeks ago
Better to be safe than sorry; really really sorry. Fill out a Sch C showing your gross income and your expenses such as mileage, supplies, cell phone, meals, etc. On a thousand dollars you probably will only have about four hundred in net reportable income which most likely will help you instead of hinder you.
by acmeraven- 3 weeks ago