Monday, May 24, 2010

Can I still file taxes if i got paid off the books?

I worked for a company last year off the books about 7 months. I earned $11,600.00. I have 2 children and was told I can still file. Will they tax me on my return and will I still get some money back?

Can I still file taxes if i got paid off the books?
Your gross wages were $11,600. I do not know your martial status? It does matter. So I will assume you have two qualifying children living with you and are maintaining a home. So you can file as Head of Household and the standard deduction is: $7,850. For each personal exemption, you would get $3,400. So with three exemptions you now have $10,200. You would have no tax liability for 2,007. You could get Earned Income Credit which will be around $4,650. Now, you may be happy with that refund but you are also shortchanging yourself. You and your employer are not contributing to YOUR social security account. People who get paid under the table for long periods of time may have a serious problem collecting Social Security when they are eligible. Also, I bet your employer is not paying unemployment taxes or Workmen's' Compensation premiums either. What would happen if you got injured while you are at work? I would find a honest employer. Get a new job that will give you a W2 form at the end of the year.
Reply:u can file if u like legal hassles.


u will owe taxes , penalties.


u will be considered a contractor.


visit library to read how to get out of this mess.
Reply:You not only can, but are required to by law. Not filing on it is tax evasion, and you can be in serious trouble if and when you get caught.





Yes, of course you'll be taxed on it. With two children you won't owe income tax, but will owe self-employment tax (social security and medicare). The amount you'll get though for earned income credit will more than pay the amount you'll owe for self-employment tax. so yes you'll get a "refund" check.
Reply:Antonio's answer is what wrong with this country. You are required to report all earnings by law. Both on and off the books. There are different forms that will need to be filed.


If 11,600 is your total income, you may have too low of an income to file. Check with the appropriate form. You can ask at an H%26amp;R Block office what forms you'll need.


If you have other income, you will likely still get a refund due to the child tax credit of $1500 per child (I think). Thank President Bush for that.
Reply:Yes, you can file. If your tax exceeds your earned income credit, you pay the difference. If your earned income credit exceeds your tax, you may eventually receive a refund of the difference, but expect it to take a while, as the IRS may not believe that you really make the $11,600 if you have no paperwork to support that.
Reply:If it is off-the-books then obviously there is no record/proof that there was a transaction that existed. So, why should taxes be paid when there was no transaction invloved?





Does this answer your question?
Reply:I have a canned explanation to apparently clueless independent contractors--and this includes being paid "off the books"--and, if you are asking relatively simple questions in this forum, no offense, but you qualify as clueless:





Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. The basic issue is the amount of control the employer has over the worker. If you are required to show up for work--personally--at a particular time, punch the clock, use the employer’s equipment and are paid an hourly rate, or another set rate based on time served, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired. When you file your income tax return, you can attach Form 8919 Uncollected Social Security and Medicare Tax on Wages and only pay the employee's half of social security. You will still have to cough up all the income tax. IRS and the states are stepping up enforcement in this abuse area.





If all you earned was $11,600 and had two children, you would probably qualify for earned income credit which will pay all your social security tax and generate a refund.
Reply:Why would you want to file? It's a tedious process, and your off-the-books income won't even be on it, because the IRS needs proof of income, so you can't put it on there


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