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Do you accept cash jobs when someone offers them to you? I've done them in the past and never had a problem. A general contractor recently offered me one to sub out some work, what are the risks involved?
Cash Jobs
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None I suppose if you pay your taxes. :blink:
As I always do in these circumstances.
Andy.
As I always do in these circumstances.
Andy.
Washington state is actively cracking down on things like this.
Have you read or heard about the new Washington state "resellers permit" that is replacing the old "resale certificate". This came about because of contractors not paying in all the sales taxes or buying things for themselves and claiming tax exempt resale. Next month you may or may not get your new resellers permit which will have to be renewed every year after a audit.
http://dor.wa.gov/Content/FindTaxesAndRates/RetailSalesTax/ResellerPermit/default.aspx
A Marysville Drywall Contractor that just got busted for not paying in the sales taxes.
http://blogs.thenewstribune.com/politics/2009/08/17/drywaller_accused_of_not_paying_850_000_
Have you read or heard about the new Washington state "resellers permit" that is replacing the old "resale certificate". This came about because of contractors not paying in all the sales taxes or buying things for themselves and claiming tax exempt resale. Next month you may or may not get your new resellers permit which will have to be renewed every year after a audit.
http://dor.wa.gov/Content/FindTaxesAndRates/RetailSalesTax/ResellerPermit/default.aspx
A Marysville Drywall Contractor that just got busted for not paying in the sales taxes.
http://blogs.thenewstribune.com/politics/2009/08/17/drywaller_accused_of_not_paying_850_000_
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Cash = no receipt, no contract, no tax, no license, no responsibility, & no tracking... Craiglist Handymen love these kinda deals... Hit-and-Run society :whistling
Okay...where's the camera...I'm getting punked...right?
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I'll take cash any chance I get . 98% of my work is through a showroom or a builder and they never forget to 1099 my ass .
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We have to remember that sometimes it may be better to get the 1099 and then write off expenses against the tax. It's a tough game, but taking cash and not reporting it is illegal. And if you were in a situation where the job went to court, I think it would be a much more difficult case, it no body was really sure who was paid what when.
John
www.constructonomics.com
John
www.constructonomics.com
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No I didn't know about the new resellers permit, thanks.
That drywall case is pretty extreme, $850,000 over five years. Plus he was charging sales tax then keeping it, that's a little different than someone agreeing to pay you cash. I will have to be careful with it in 2010 when I'm required to get the resellers permit.
Mainly I was thinking risks as in liability, such as what if there's an accident? Or what if there's something wrong with the work? Someone told me once that if you pay someone cash and they make a mistake, you can't go after them for it later. Of course in my case, with the job I was offered now, that would be a good thing for me. He's the prime contractor, I'm a sub, so if I make a mistake he can't come after me for it later? Another concern I had is what if I had an employee on the job, say I paid him cash and he got injured? What would be the consequences? What issues would I have with L&I? You'd have to live in Washington to know what I mean by L&I, but there are a few on this site.
There is very little difference between a cash job and a job paid by check or credit card. You are still required to file all net profits to be taxed as if it were being paid any other way.
If you are operating under a contract, it is the contract that will make the call on how things happen when something goes wrong, not the payment method.
Now if you are operating under the radar and offer no contract and are a shady character then there is no proof that you did the job, so they can't come after you anyway.
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Yeah I know, when someone says "hey this will be a cash job" they don't mean it literally as in the green stuff. They mean they want to pay you with no taxes (under the table). True with no contract plus no taxes taken out, there's no proof you did the job.
It only took me once to learn...I have a "contractor" from Virginia ask me what my bottom dollar cash price was...Now this meant to me that he would pay me cash and I wouldnt get a 1099. This was in my early years and didn't know better. I gave hime a dollar figure hoping an "in" would get me lots more work. It did...I worked for a year for that guy...Come tax time I got a 1099 and had to come up with about 5 grand in additional self employment taxes. We aren't friends no more. What I learned...TRUST NOBODY.:no:
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Hmm, I was thinking the same thing, that if I give this guy a good deal, he can get me lots more work. But I think if I do this, it will be the last cash job I do for him. It's my first year in business, so I haven't done any end of the year taxes yet, I'm a little unfamiliar with the 1099. But how did they track that extra 5 grand you made? If he pays you cash, you can even say someone gave it to you.
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IRS (1099) tracking system uses your registered SSN# (Social Security #) and EIN# (business identification #)... well unless you DON'T want to give out to him OR he doesn't ask you for it to report to IRS later??? .. Not sure??? .. Go ask him 1st before take his cash & run .. j/k :whistling
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If you are self employed, every job is a cash job. It does not matter what form of payment you receive for the job. You are operating a business and it is reported. There is no such thing as a side job when you are self employed.
It cracks me up when someone asks "How much if I pay cash?" It is the same amount, period. If this is your first year in business, start off right and report all of your sales. You shouldn't owe much in taxes anyway if you have a good accountant, good record keeping and lots of receipts.
It is pretty tough to make a profit the first couple of years, I guess I should say, it is pretty tough to make a profit, in a new business today. I would assume you will hire an accountant for your tax return, at least, and if you are married with dependents, you will probably not owe (much). Unless you have been knocking back some seriously good jobs.
Do yourself a favor, stay legit, this way you will always like the guy that looks back at you in the mirror. Just because you can cheat doesn't mean you should.:thumbsup:
It cracks me up when someone asks "How much if I pay cash?" It is the same amount, period. If this is your first year in business, start off right and report all of your sales. You shouldn't owe much in taxes anyway if you have a good accountant, good record keeping and lots of receipts.
It is pretty tough to make a profit the first couple of years, I guess I should say, it is pretty tough to make a profit, in a new business today. I would assume you will hire an accountant for your tax return, at least, and if you are married with dependents, you will probably not owe (much). Unless you have been knocking back some seriously good jobs.
Do yourself a favor, stay legit, this way you will always like the guy that looks back at you in the mirror. Just because you can cheat doesn't mean you should.:thumbsup:
I tell people this, (and I've been asked "what's your cash price?" many times.)
The only person that benefits from a cash job is the customer.
YOU take the risk of being caught not reporting income. YOU take the risk of an off the books insurance hit (in a couple of ways). All of the burden and risk falls on the guy TAKING cash as compensation. The customer get's a supposed cheaper price, no real downside unless there's permits that should be pulled ect.
Think about it.
If it's some rinky dink drive by and fix my screen door for 20 bucks on the way home, well, that's one thing. If it's build me a deck and don't pull a permit and I'll pay you cash? Sorry, no can do.
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