I'm having issues with my taxes for 2017, I know it isn't time to do taxes yet but the issue that I'm having is that my boss has been paying us under the table, half of our earnings in cash half on check and paystub. I'm ignorant when it comes to doing taxes I'm 20 years old and I need that to show on my annual income is there anything that I can do? I have plenty of bank statements showing that I had deposited a lot more than I earned. Our tips were not taxed as well. I know that I will owe a hefty sum to the IRS for this but it's very important to me to increase my income as I am trying to bring my fiancee here from out of the country. My income is only showing about 7500 as of now but I made double of that that was paid under the table and my tips were not accounted for which was about 30 a day in tips five days a week. Is there anything I can do? I'm so lost... Thank you...
Does the pay stub show FICA (social security and medicare ) tax witholding? That is, is your above the table pay being treated as an employee or a contractor? Employees will get a W-2. Contractors get a 1099-Misc.
The IRS considers undocumented cash income (no W-2 or 1099-MISC), for work performed, to be self employment income. Enter at "Business Income & Expenses" and TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & medicare) on any profits greater than $400. You report the income from your own records. Depositing the cash is a good idea.
If your above the table pay is reported on a 1099-Misc, that pay and your tips will go on the same Schedule C as the under the table pay. In TurboTax, you will start by entering the 1099-Misc first.
If you get a W-2, the TT interview will include a question about tips. Tips will be entered there, instead of Schedule C and will end up on line 7 of form 1040 with your wages. Form 4919 will be prepared to pay FICA tax on the tips. FICA tax on tips on line 7 is taxed at half the rate as tips on schedule C
Your boss is acting illegally, perhaps in an effort to save on the employer's share of Soc Sec and Medicare payroll taxes, as well as Unemployment and Worker's Comp. Many states are cracking down on this.
Is there something I can do? I really need this on my annual income..
Follow what HalAl says below, but be sure to keep excellent records.
You can also contact your State Labor Dept.
Does the pay stub show FICA (social security and medicare ) tax witholding? That is, is your above the table pay being treated as an employee or a contractor? Employees will get a W-2. Contractors get a 1099-Misc.
The IRS considers undocumented cash income (no W-2 or 1099-MISC), for work performed, to be self employment income. Enter at "Business Income & Expenses" and TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & medicare) on any profits greater than $400. You report the income from your own records. Depositing the cash is a good idea.
If your above the table pay is reported on a 1099-Misc, that pay and your tips will go on the same Schedule C as the under the table pay. In TurboTax, you will start by entering the 1099-Misc first.
If you get a W-2, the TT interview will include a question about tips. Tips will be entered there, instead of Schedule C and will end up on line 7 of form 1040 with your wages. Form 4919 will be prepared to pay FICA tax on the tips. FICA tax on tips on line 7 is taxed at half the rate as tips on schedule C
My normal check is beig treated as a w2 he never said about the 1099.
Some of the cash I may not have seposited sonis it better for me to over estimate the amount I earned than under estimate? I really dont want to get in trouble due to my ignorance on taxes.