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Tue Feb 26, 2013, 08:09 PM

What should the response be to someone wanting to be paid in cash for a service?

I have a woman who owns a housecleaning company who has just begun cleaning our house once a month. She did a great job last time, and when it was time to pay her, I asked her how to write out the check (to Jane's Housecleaning Service, or Jane Smith, etc.) and she said, "You can write it to cash, or better, give me cash the next time."

I was a little shocked, because her company name is on her truck, and I know she's bonded and licensed. I wrote the check out to cash.

I guess the reason I wonder about it is that she's probably paying herself and her employees in cash and she's most likely (can't be sure, of course) is not paying taxes on all of her earnings, and her employees most likely aren't paying taxes, either, or into Social Security. I don't want to be the tax police or anything, but the more I think about it, the more it bothers me thinking of people scamming the system, yet gaining the benefits - taxes are our dues for living in and taking part in a civilized society.

What advice, if any, do you have for me? She's really a lovely lady, and as I said, she did a great job. Should I leave cash as she suggested, or write a check?

126 replies, 6624 views

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Reply What should the response be to someone wanting to be paid in cash for a service? (Original post)
phylny Feb 2013 OP
slackmaster Feb 2013 #1
pnwmom Feb 2013 #42
green for victory Mar 2013 #123
2naSalit Mar 2013 #124
kiapolo Mar 2013 #126
JimDandy Feb 2013 #63
slackmaster Feb 2013 #91
pipi_k Feb 2013 #92
roody Feb 2013 #2
Lint Head Feb 2013 #3
Warren Stupidity Feb 2013 #26
merrily Feb 2013 #86
Cleita Feb 2013 #4
pnwmom Feb 2013 #43
Tumbulu Feb 2013 #57
JimDandy Feb 2013 #68
pnwmom Feb 2013 #95
JimDandy Mar 2013 #99
pnwmom Mar 2013 #100
JimDandy Mar 2013 #121
pnwmom Feb 2013 #96
Evergreen Emerald Feb 2013 #5
demwing Feb 2013 #31
SmileyRose Feb 2013 #50
Egalitarian Thug Feb 2013 #6
notadmblnd Feb 2013 #7
Tumbulu Feb 2013 #59
Ohio Joe Feb 2013 #8
doc03 Feb 2013 #10
Ohio Joe Feb 2013 #15
Pisces Feb 2013 #17
FirstLight Feb 2013 #65
kelly1mm Feb 2013 #76
napi21 Feb 2013 #87
backscatter712 Feb 2013 #13
joeglow3 Feb 2013 #60
Adsos Letter Feb 2013 #80
FarCenter Feb 2013 #9
backscatter712 Feb 2013 #11
ProdigalJunkMail Feb 2013 #12
slackmaster Feb 2013 #24
pnwmom Feb 2013 #47
ProdigalJunkMail Feb 2013 #88
Pisces Feb 2013 #14
kelly1mm Feb 2013 #78
Travis_0004 Mar 2013 #103
kestrel91316 Feb 2013 #16
Ikonoklast Mar 2013 #114
phylny Feb 2013 #18
IdaBriggs Feb 2013 #19
phylny Feb 2013 #22
IdaBriggs Feb 2013 #32
Ruby the Liberal Feb 2013 #20
Lex Feb 2013 #71
Travis_0004 Mar 2013 #105
LadyHawkAZ Feb 2013 #21
Art_from_Ark Feb 2013 #46
JimDandy Feb 2013 #69
merrily Feb 2013 #84
HooptieWagon Feb 2013 #23
southernyankeebelle Feb 2013 #25
Adsos Letter Feb 2013 #83
southernyankeebelle Feb 2013 #98
Warren Stupidity Feb 2013 #27
jberryhill Feb 2013 #39
JimDandy Feb 2013 #70
Jeff In Milwaukee Feb 2013 #28
Nye Bevan Feb 2013 #29
maggiesfarmer Feb 2013 #30
thelordofhell Feb 2013 #33
kelly1mm Feb 2013 #79
demwing Feb 2013 #34
Pterodactyl Feb 2013 #35
Lone_Star_Dem Feb 2013 #36
jberryhill Feb 2013 #37
Warren Stupidity Feb 2013 #40
jberryhill Feb 2013 #41
snooper2 Feb 2013 #44
jberryhill Feb 2013 #56
snooper2 Feb 2013 #61
Travis_0004 Mar 2013 #108
jberryhill Mar 2013 #111
Travis_0004 Mar 2013 #113
lynne Feb 2013 #38
Demo_Chris Feb 2013 #45
phylny Feb 2013 #54
1-Old-Man Feb 2013 #48
JVS Feb 2013 #49
Zorra Feb 2013 #51
Buzz Clik Feb 2013 #52
bhikkhu Feb 2013 #53
indie9197 Feb 2013 #55
phylny Feb 2013 #64
Adsos Letter Feb 2013 #85
brewens Feb 2013 #58
Tom Ripley Feb 2013 #62
kenny blankenship Feb 2013 #66
Ghost in the Machine Feb 2013 #67
JimDandy Feb 2013 #72
Ghost in the Machine Feb 2013 #77
Sadiedog Feb 2013 #73
lonestarnot Feb 2013 #74
OldDem2012 Feb 2013 #75
MrSlayer Feb 2013 #81
merrily Feb 2013 #82
LWolf Feb 2013 #89
Zax2me Feb 2013 #90
pipi_k Feb 2013 #93
99Forever Feb 2013 #94
phylny Feb 2013 #97
Travis_0004 Mar 2013 #109
larkrake Mar 2013 #101
ThomThom Mar 2013 #102
itsrobert Mar 2013 #104
ann--- Mar 2013 #106
Texasgal Mar 2013 #107
zonkers Mar 2013 #110
longship Mar 2013 #112
Raine Mar 2013 #115
putitinD Mar 2013 #116
wickerwoman Mar 2013 #117
Live and Learn Mar 2013 #118
riderinthestorm Mar 2013 #119
TorchTheWitch Mar 2013 #120
Ter Mar 2013 #122
Iwillnevergiveup Mar 2013 #125

Response to phylny (Original post)

Tue Feb 26, 2013, 08:14 PM

1. If you trust her to be in your house, why don't you trust her to pay her taxes?

 

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Response to slackmaster (Reply #1)

Tue Feb 26, 2013, 10:50 PM

42. Because people who pay taxes usually accept checks or other forms of payment

that document the transaction.

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Response to pnwmom (Reply #42)

Fri Mar 1, 2013, 11:34 PM

123. Every detail of the Proles lives must be documented and recorded

 

even the few hundred dollars a cleaning woman makes.

By a government that lies, cheats and steals from its subjects.
And demands more and more secrecy. What are they hiding?
Many people are more bothered by whether the cleaning lady is reporting every cent.

And that government spends >$2000 per second on spreading freedom bombs.
http://costofwar.com

Isn't it grand?

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Response to pnwmom (Reply #42)

Sat Mar 2, 2013, 12:48 AM

124. I wonder how many times

she took payment by check and it bounced? Cleaning service workers, including those who do business as hers appears to be often get stiffed. As long as you have documentation of the transaction, you shouldn't worry.

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Response to 2naSalit (Reply #124)

Sat Mar 2, 2013, 01:21 AM

126. This is what I thought...

...times are getting tough. Getting stiffed once is going to have far reaching consequences for the small business.

If you don't like the cash only policy you can shop else where. I do it all the time when securing services or purchasing good.

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Response to slackmaster (Reply #1)

Tue Feb 26, 2013, 11:56 PM

63. Trust has to be earned. Clearly she's already having doubts

about the house cleaner in one regard and their work relationship "has just begun". Not off to a good start.

Cash, or 'under the table', transactions are never a good idea, because the lack of documentation leaves one vulnerable to potential accusations of non-payment for services.

My advice: find a reputable cleaning company that has no problem documenting receipt of payment for their services.

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Response to JimDandy (Reply #63)

Wed Feb 27, 2013, 09:29 AM

91. If I had doubts about someone's honesty WRT paying taxes, I wouldn't let that person...

 

...set foot inside my home.

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Response to JimDandy (Reply #63)

Wed Feb 27, 2013, 09:50 AM

92. In a case like that...

I would think that someone who is working "under the table" would probably not be inclined to bring someone else to small claims court claiming s/he hadn't been paid for services rendered.

Or, not someone with an ounce of sense, anyway, knowing that a judge would ask if s/he had filed taxes, blah blah blah.

OTOH, one solution to this problem would be to get a receipt booklet and have the person sign it each time s/he was paid. That way the service provider doesn't have to deal with checks and such but the customer has proof that payment was made. Just in case the service provider is stupid enough to file suit for nonpayment of a cash (under the table) transaction.

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:15 PM

2. Is she an undocumented immigrant?

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:16 PM

3. Tell her there are IRS implications and that you are concerned. If she says something negative

about paying her share of taxes for doing business, you're letting someone into your home who is not trustworthy. I would not want them in my home.

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Response to Lint Head (Reply #3)

Tue Feb 26, 2013, 09:13 PM

26. There are no IRS implications for the op.

Nor is there any requirement for a business to accept any form of payment other than cash. In fact they don't have to accept cash either, they could demand payment in Squirrels as long as they did so up front. So if the op doesn't want to pay for services using the legal tender of the us government, the op should take his business elsewhere, or mind his own business.

For more than 25 years I've bought bagels at a great mom and pop bagel bakery every week and they only take cash. I never once thought that in doing so, in taking payment using legal tender, they were law breaking illegal immigrant exploiting tax evading criminals, but that is just the way I roll.

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Response to Warren Stupidity (Reply #26)

Wed Feb 27, 2013, 02:02 AM

86. W9

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:19 PM

4. She's responsible for filing her taxes not you.

However, in California it is required that you pay FICA or file for it anyway and give her a 1099 at the end of the year if she is a housekeeper. If she has her own company, she should have a business license of some sort which means she files taxes and pays insurance. I don't know if it's the same wherever you are. Check with an accountant for your liability.

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Response to Cleita (Reply #4)

Tue Feb 26, 2013, 10:52 PM

43. You don't have to do this when you hire independent contractors, who control their own work.

You do when you hire someone to work directly for you under your supervision.

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Response to pnwmom (Reply #43)

Tue Feb 26, 2013, 11:34 PM

57. Not true

One has to file a 1099 for independent contractors if you pay them more than $600 in a year. If less than that , no obligation to file the 1099.

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Response to Tumbulu (Reply #57)

Wed Feb 27, 2013, 12:14 AM

68. Exactly.

Had to be very careful with this when I had a business. Every once in a while I'd temporarily have too much work for my employees to handle, so I'd have to sub-contractor out some of the jobs. Had to be hand's off as far as directing how the work was carried out. At that time the 1099 limit was less. I didn't hire one particular sub-contractor again after I realized he was gaming the limit. Turns out he did this with several other companies in my line of business. The only reason someone does this is to evade detection of income.

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Response to JimDandy (Reply #68)

Wed Feb 27, 2013, 12:44 PM

95. That's because you were operating a business. The 1099 form is for businesses.

Someone here posted the form and it said:

"Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit"

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Response to pnwmom (Reply #95)

Fri Mar 1, 2013, 06:29 PM

99. So basically both parties have to be in business? n/t

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Response to JimDandy (Reply #99)

Fri Mar 1, 2013, 08:53 PM

100. No, I don't think so. Because businesses have issued 1099's

to me as an individual -- for example, I got one once for winning a cash prize.

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Response to pnwmom (Reply #100)

Fri Mar 1, 2013, 10:32 PM

121. Interesting. Thanks

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Response to Tumbulu (Reply #57)

Wed Feb 27, 2013, 12:45 PM

96. The 1099-misc form is for payments made by businesses.

Someone posted it here. It says:

"Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit"

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:20 PM

5. Get a receipt. N/t

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Response to Evergreen Emerald (Reply #5)

Tue Feb 26, 2013, 09:21 PM

31. ^^^This^^^

Cover your assets, hope she covers hers.

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Response to Evergreen Emerald (Reply #5)

Tue Feb 26, 2013, 11:06 PM

50. this

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:21 PM

6. How much did you pay for her work? n/t

 

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:21 PM

7. Some of our clients write checks, some pay cash. We expect payment

when the job is complete. But that is not what you're worried about. You're worried that she isn't paying her taxes. Well you wouldn't turn her into the police. You would call the IRS. I'm an independent contractor. I work for a woman who owns a cleaning business. She 1099's us. That means we have to pay our own taxes. Now if you want to keep track of what you pay her and 1099 her at the end of the year, then the IRS will have a copy and if she fails to claim it as income, the IRS will know when she files her taxes and will eventually send her a letter stating how much tax she owes on the income that she earned cleaning or you. However, you will not be able to claim it as an expense and use it as a deduction on your taxes.

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Response to notadmblnd (Reply #7)

Tue Feb 26, 2013, 11:37 PM

59. If you want to take it as an expense

You need to file a 1099.

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:28 PM

8. What if she is cheating on her taxes?

I don't much give a shit, I'll worry about small fry after we straighten out the giants that don't pay shit. For the time being... I would pay her in cash if that is her preferred method of payment. It is a private transaction and there are no requirements that say cash cannot be used.

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Response to Ohio Joe (Reply #8)

Tue Feb 26, 2013, 08:42 PM

10. Yes but there are millions of those small fries cheating the system. I would not be surprised

if they add up to more than the big fish. I know many of them myself that work under the table and to a man
they are the first to bitch about welfare and food stamps.

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Response to doc03 (Reply #10)

Tue Feb 26, 2013, 08:46 PM

15. So... 'Lets get the small fry first'? Is that what you want to do?

I disagree. I say go after the real criminals first... Corporations.

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Response to doc03 (Reply #10)

Tue Feb 26, 2013, 08:48 PM

17. Hmm. I know a few myself and they don't make enough money to qualify for income tax. They are poor.

We are talking about housekeeper. Unless she is cleaning Romney's house I can't imagine she is making a mint.

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Response to Pisces (Reply #17)

Wed Feb 27, 2013, 12:02 AM

65. ding!

I know plenty of ind. contractors...some housekeepers, some do small office work or fix-it stuff. It is very difficult to get a business off the ground at that level, and paying additional people is between them. 1099's are good, but they are also usually something that requires more paperwork, etc. The moving guys I know pay their guys in cahs most times, just because it is a 'split the gig' kind of deal.

Just because someone is licensed and bonded doesn't mean they aren't struggling. The cash aspect may be for reasons as simple as not having a reliable bank acct, or a deal to pay helpers in cash...don't judge, if you trust the person on a real level, the cash aspect is nothing more than a request from the vendor...

And the whole 'bust her on her taxes' idea mentioned above is just plain cruel... you don't know how much she makes a year, or how many people she supports, etc. The big wigs will out rob the rest of ALL of us before this would make a difference...

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Response to Pisces (Reply #17)

Wed Feb 27, 2013, 01:29 AM

76. What about Self Employment taxes (aka FICA, aka Social Security and Medicare taxes)?

They kick in at $400 on business income and are 15.625%. While she may have no income tax liabilty ($9750 for a single, no dependents = 0 income tax), she probably does have a SE tax liability.

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Response to kelly1mm (Reply #76)

Wed Feb 27, 2013, 03:48 AM

87. Yes, and the time will come when they're old and receive very little if any

SS because she never paid into the program. I have a relative who worked for her husband as his assistant and claimed $5.00/hr income to reduce their SS tax liability. That was fine for all those ears, but when she turned 65, she was shocked at the small amount of her SS check. She even said, I guess we should have paid a little more in, huh?

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Response to Ohio Joe (Reply #8)

Tue Feb 26, 2013, 08:43 PM

13. Just make sure you file the W-2 or whatever tax forms are required, then the taxes are her problem.

You declared as you're legally required when you paid her - if she doesn't do so, it's on her.

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Response to Ohio Joe (Reply #8)

Tue Feb 26, 2013, 11:48 PM

60. Sadly, per the IRS's statistics, this is one of the largest ares to generate revenue.

There are MANY people who flat out evade taxes and fail to pay into social security. Frankly, I think our government has the ability to persue both and I expect them to.

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Response to joeglow3 (Reply #60)

Wed Feb 27, 2013, 01:41 AM

80. THIS ^

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:31 PM

9. If you pay cash, you should get a discount.

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:42 PM

11. CYA: Give her the cash, with a receipt, make her sign for it, and send her a W-2 form.

If you give her cash without having a paper trail, she could claim you shorted her. Document, document, document!

Also, if she's trying to do work under the table, that could get you entangled in IRS difficulties, so make sure you fill out all the tax paperwork and send her the W-2 or whatever tax forms are appropriate.

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:42 PM

12. you can always 1099 her at the end of the year

if that is your desire...

sP

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Response to ProdigalJunkMail (Reply #12)

Tue Feb 26, 2013, 09:09 PM

24. Only if the total pay is at least $600

 

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Response to slackmaster (Reply #24)

Tue Feb 26, 2013, 10:58 PM

47. I think that form applies only to payments made by a trade or business.

"Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit"

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Response to pnwmom (Reply #47)

Wed Feb 27, 2013, 06:39 AM

88. interesting...

and good to know. thanks for the education... i have a hard time reading those pesky IRS docs. they are worse than some of the tech docs i have to read.

this being the case, i don't know if i'd do business with this person. paying taxes and properly paying employees is a part of business. if she is being paid in cash then that sounds suspicious to me. at the very least i would ask WHY she wants to be paid in cash and then ascertain if her answer is plausible and then is it truthful.

sP

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:46 PM

14. I dont see most housekeepers making that much per year that she would have to pay income tax. Maybe

State. I am surprised that you would begrudge this woman he under the table money? Do you worry about the bartenders,
waiters and waitresses your tip? Seems petty at best to me. If you can afford a housekeeper be glad she is a good woman
and stop worrying about this poor woman's taxes.

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Response to Pisces (Reply #14)

Wed Feb 27, 2013, 01:32 AM

78. What about SE taxes? AKA FICA/SS/medicare taxes? That is 15.625% over $400. Should

she have to pay SE tax?

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Response to kelly1mm (Reply #78)

Fri Mar 1, 2013, 09:03 PM

103. Yes. She should be paying the taxes

But I don't see how that is releveant. If the OP agrees to pay her x dollars to clean the house, then when she cleans the house, pay her.

The way she files her taxes is between her and the IRS. I wouldn't care if she puts it in a swiss bank account, or claims it all. As long as she cleans my house, and gets paid, I would be happy.

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:47 PM

16. Pay her however she wishes and get a receipt. After that, it's really not your concern.

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Response to kestrel91316 (Reply #16)

Fri Mar 1, 2013, 09:40 PM

114. The cancelled check is a good enough receipt.

Put a notation "For Services Rendered" on it.

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:55 PM

18. Good answers from all.

I will find out, but I believe that unless she's a housekeeper that we employ on a full time basis (we do not), she's providing a service for us, she is not our employee. I will be certain to find that out.

And of course, when I said "tax police" I didn't mean I'd call the actual police (duh), but the IRS - which I won't do. She's not an undocumented immigrant (I come across plenty of them in my work with Early Intervention, and I'm not calling anyone on them either).

I think doc03 said it best - think of the underground economy and the number of people not paying into the system. Of course the corporations aren't paying their fair share, but that doesn't mean that it's okay for other people not to pay their taxes, either.

I'm not begrudging anyone anything, pisces. I was just wondering what others thought about this underground economy, how I should respond, etc. We make a good salary and pay our taxes willingly. I have no idea how much she makes, nor do I care.

Just wondering about cash versus check. I'll check into what obligation I have, if any, for tax liability. I'm certainly not looking to deduct the cleaning as an expense

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Response to phylny (Original post)

Tue Feb 26, 2013, 08:57 PM

19. Welcome to the Underground Economy.

Of course she isn't claiming all of her income (but I guarantee she is taking every deduction allowed by law).

If you aren't comfortable knowing that you are hiring a tax scammer (did you really think it was just a "big business" thing?), hire someone else. Or quit asking questions and either a) write a check to her business name, or b) suck up the fact that even NICE people think they are entitled to not pay their fair share.

Optional: demand a receipt, which you should be doing when you pay for a service. Yes, she is bonded and insured (altho I would demand CURRENT proof, and make a phone call to verify) so if one of her employees starts stealing you would have proof they actually worked for you, but odds are good most people don't ask, and if she does have a problem, she can either disappear or deny if there is a claim. (Come on - when a person scams the government because they are entitled to, what makes you really believe they are going to treat you differently? It is a character thing, and it is how we behave when we think no one is looking that our true character comes shining through.)

Welcome to peer pressure, and ten thousand reasons to pretend you don't know what is going on. You will find many in this thread: The big guys do it, so who cares? Who are you going to squeal to? What proof do you have? Etc.

At the end of the day, do you want her to clean your house or not? People who pay taxes will charge more. How much is a clean toilet worth to you?

No one is watching. Are you going to take money out of someone else's pocket because of YOUR morals?

It is easier when we can play stupid, isn't it?

Good luck.

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Response to IdaBriggs (Reply #19)

Tue Feb 26, 2013, 09:07 PM

22. Vulcan mind meld, Ida :)

It's funny - we've put two through college, and our last is a junior so our salaries have gone up a bit, but expenses are declining. I said to my husband, "I'm freaking exhausted. Can we PLEASE have someone clean one time a month PLEASE???" (and yes, he does his fair share inside and out, but I work hard). We are at a place in our lives where we can afford it.

So, to read on this thread that I would begrudge someone making a living (don't know me very well), that the big guys cheat so it's okay, how do I know she's not paying taxes? You know, if I ask for cash, there's a reason for it, most likely because I don't want a paper trail

Ida, you bring up great points, especially about liability and proof of bonding. I'm not looking to get someone to work for "cheap" - I am willing to pay a fair price. The house is "very well kept" (her words, thank you, not mine) and she's cleaning only one floor - two bedrooms (only one is slept in) two bathrooms, kitchen, living room, sunroom, dining room. $100. Probably comes out to $30/hour or so.

Anyway, interesting thoughts on the thread here. I'll find out what if any liability we have, and talk to her if I see her tomorrow.

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Response to phylny (Reply #22)

Tue Feb 26, 2013, 09:22 PM

32. It's tough stuff, especially when they are LOOKING at you.

My last cleaning woman (hired because my MIL, bless her, has higher cleaning standards than I do, and helps us out with child care, and there is No Way I will EVER clean "good enough" for her, if you know what I mean - lol!) asked for "checks made out to cash." We paid it that way, but it blew up on us at the end.

The "check scanner" at her bank had an issue where it read the line on the left hand side of the box as a "1" and an extra hundred dollars was removed from the account by accident. Oops! Since it was made out to Cash, our bank had some issues with it, and at first told us someone had altered the check "on purpose." She had actually gotten the extra hundred / not noticed / blah, blah. We were reimbursed, but by the end, there were some hurt feelings, and we mutually terminated the relationship. (It really was a bank error, and I believe it was an oversight on her part, but it sucked up a lot more of my time than I was happy with.) Plus, did I mention the lectures from the bank people?

Yuck.

I am not going to go Holier than Thou on this one - I have been uncomfortable about it, but I paid Cash and comforted myself with the fact I pay my taxes, etc. Classic enabler. Sigh. Good, honest trustworthy cleaning folk are hard to find!



P.S. Your mind to my mind.... Lol!

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:00 PM

20. If you pay her over $600 in the year, send her a 1099 next January

Then you know you did right by the law, and if she is paying people under the table (which they likely get no benefits, and definitely no workers comp or unemployment rights in that case) - then she can have that conversation with the IRS.

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Response to Ruby the Liberal (Reply #20)

Wed Feb 27, 2013, 01:07 AM

71. ^^^ This. You need to file a 1099-MISC on her or her business.

Last edited Sun Mar 3, 2013, 11:58 AM - Edit history (1)

If you paid over $600 over the course of the year. Ask her for her company's EIN or her Soc. Security # and address for the 1099. They are easy to file. You just send one to her and one to the IRS. The forms are even at Staples or Office Depot.

edited to correct 1099 form

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Response to Lex (Reply #71)

Fri Mar 1, 2013, 09:07 PM

105. YOu would not send her a 1099-s.

First off a 1099-s deals with real estate. Maybe you were thinking of a 1099-misc.

Even so, you wouldn't give her one. 1099's are used when a business pays a comapny or independent contractor. So if the OP had the housekeeper clean his business, he would give her a 1099.

As an individual he is not required to give anybody a 1099, unless his house is his primary place of business, and the cleaning is part of a business expense, which I highly doubt it is.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:03 PM

21. I'd just pay the cash, as requested

If she's a small business, it's possible that she's had people write rubber checks before, and just prefers not to accept them now.

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Response to LadyHawkAZ (Reply #21)

Tue Feb 26, 2013, 10:58 PM

46. Rubber checks can be a big problem

I tried the small business route at one time, and the rubber check can be a killer-- not only does it represent lost payment for goods/services, to add insult to injury it often also incurs a charge from the bank.

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Response to LadyHawkAZ (Reply #21)

Wed Feb 27, 2013, 12:45 AM

69. The housekeeper had no problem taking a check...

she just wanted it written to CASH.

While not adverse to income, she apparently is adverse to income detection.

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Response to JimDandy (Reply #69)

Wed Feb 27, 2013, 01:56 AM

84. She did have a problem taking a check.

And you are assuming that the only reason to have a check made out to cash is income detection by the IRS.

That is not so. For one thing, you have no idea what her domestic situation is or what her bank is like. The tellers at my bank nitpicks over everything and I have never once tried to put anything over on the IRS or the bank. I've ceased dealing with them entirely, I use only the ATM, but the ATM won't cash a check for me.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:08 PM

23. Uh...pay her cash?

If she is an employee, you have to take out withholding and SS. If you are hiring her company, its not your problem. Let her deal with it, there's no reason to get involved.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:11 PM

25. She is hidding something. Chances are she isn't paying her employees taxes or

 

than can be illegals. I would tell her that you have to pay by check besides it being proof that you paid but you also need it for your tax purposes. I wouldn't trust someone in my house cleaning if she isn't above board. Something isn't right. You know it yourself. Call better business bureau and at least check it out. Check her out on line.. You never know.

My mother-in-law years ago worked for a local doctor. Well respected in the community. You would never have known that he the money he took out to send for my mother-in-law retirement plan he kept. She didn't know until she went to retire. She was short about $5,000.00. She ended up taking in cattle to raise the money to pay into her retirement. You can't trust anyone.

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Response to southernyankeebelle (Reply #25)

Wed Feb 27, 2013, 01:50 AM

83. Cattle?

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Response to Adsos Letter (Reply #83)

Wed Feb 27, 2013, 03:29 PM

98. LOL yes cows. She raised and sold cows and put the money in her social security because

 

her boss took money out of her check to send to social security however, he ended up keeping it for himself. The old man died before she could ever sue him for it. Everyone should check their social security every now and then.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:15 PM

27. I grew up in a world where "cash" was the normal form of payment.

What the fuck happened?

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Response to Warren Stupidity (Reply #27)

Tue Feb 26, 2013, 09:48 PM

39. The first time I heard of a plumber having a "cash" rate and a "check" rate


Was about 40 years ago.

This is nothing new.

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Response to Warren Stupidity (Reply #27)

Wed Feb 27, 2013, 12:57 AM

70. The world became more

litigious, relationships impersonal, interactions anonymous, transactions global and money digital.

This is a business relationship and, as such, documentation of payment is prudent.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:15 PM

28. Ultimately, it's not your responsibility

My guess is that she's not reporting income. If you don't like being a party to something like that, then you hire someone else. As an alternative, you could tell her that for your own personal accounting purposes, you need to pay her with a check. If she balks, that's the end of it.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:19 PM

29. Maybe she finds cash more convenient. Her tax affairs are none of your business. (nt)

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:21 PM

30. Honestly, I would consider using the cash payment as a negotiating point for a better rate.

if you're cash heavy and the recipient of payment places a higher value on cash than a check, credit card, etc..., they may very well take a lesser amount to get the cash.

Now, if you believe the reason they want the cash is for tax avoidance reasons, there's more to it. I believe the law is that if they are incorporated, you're not legally responsible for they're reporting. However, if they aren't incorporated, then you are required to issue a 1099 if you pay over $600. Double check me on this information -- I am not an accountant or tax lawyer.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:23 PM

33. Maybe she takes only cash because people have written her bad checks

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Response to thelordofhell (Reply #33)

Wed Feb 27, 2013, 01:38 AM

79. Then why would she take a check written to cash? nt

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:31 PM

34. How about giving her a postal Money Order?

The money order never has to see her bank, you have a receipt, and you are supporting your local post office (if only a little).

That said, there's nothing wrong with paying cash. She's a small business owner, not your employee. We never question whether the other local businesses are paying their taxes, right? Convenience stores, bars, cafes, book stores..do they pay taxes? Yep, and if they don't, it's between them and the auditor. So she prefers cash? That's cool -- it is legal tender for all debts, right? When did asking for cash start seeming suspicious?

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:34 PM

35. There a many people who would love to have your business.

If you prefer to pay by check, pay her by check - or find a replacement.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:39 PM

36. Get a receipt for her work and the rest is her problem.

All you need is proof she did the service if you ever find something broken or missing.

However, I wouldn't use a cleaning service that wasn't insured and bonded. But then I don't mind paying more for one that is when I have one come in to clean a rental either.

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:44 PM

37. Someone above said to send her a 1099


You could just ask for a W9 up front

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Response to jberryhill (Reply #37)

Tue Feb 26, 2013, 09:50 PM

40. Why? It is none of your business. She is not your employee.

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Response to Warren Stupidity (Reply #40)

Tue Feb 26, 2013, 10:02 PM

41. No shit, that's what a W9 is for


And you know what? I run my own business and I pay every cent of tax I owe. I don't give a shit if you are Mitt Romney or a housecleaner - this is America, and you pay your fucking taxes.

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Response to jberryhill (Reply #41)

Tue Feb 26, 2013, 10:53 PM

44. LOL

hard core dude

The IRS is looking for a few good men

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Response to snooper2 (Reply #44)

Tue Feb 26, 2013, 11:29 PM

56. Really?

Not paying taxes is NOT okay



Is there some income level at which it is or is not okay to pay what you owe?

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Response to jberryhill (Reply #56)

Tue Feb 26, 2013, 11:51 PM

61. some income level, beats me..

Ask 100 people if they rounded up their charitable donations

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Response to jberryhill (Reply #41)

Fri Mar 1, 2013, 09:12 PM

108. An indivual does not file 1099's

A business is required to file 1099's, and individual is not.

Why is everybody so nosy. Pay her for cleaning. If she is not paying taxes that is between her and the IRS.

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Response to Travis_0004 (Reply #108)

Fri Mar 1, 2013, 09:28 PM

111. I remain astounded by some of the comments here

Hey, I'm a liberal. I believe there are a lot of things we - us - the system in which we participate - pays for that are worth paying for. The US government is not some alien entity. It belongs to us. We decide who runs it. We elect representatives that pass the laws. Like it or not, its OUR government.

I pay every penny of what I owe, and it is quite a bit. In fact, I voted for the guy who was going to raise MY taxes. I did that out of some apparently idiotic notion I have about fairness.

I attended public schools. I have degrees from institutions which receive state and federal support. I have a disabled adult child who receives SSDI. Those things happened, and still happen, because people pay their taxes. Tax cheats aren't just "cheating the IRS", they are cheating everyone - including me, you, and everyone else.

Why the FUCK should I pay my share if other people aren't paying theirs? And I'm not talking about progressivity - our tax system should be progressive. And it should include credits like the EITC and so on.

But, godammit, if your problem is paying your taxes, the solution is to work to get it changed, not to cheat. Heck, if I got creative, I could hide more tax liability than most people have income. That's how well I did, thanks to the state and federal support of the institutions that helped me get where I am.

So I guess I should just cheat, right? That wouldn't be fair, it wouldn't be good, and I don't want to do business with anyone who thinks they have some kind of privilege to cheat everyone else.

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Response to jberryhill (Reply #111)

Fri Mar 1, 2013, 09:36 PM

113. I never said I was for cheating

Why are we having a big debating on cheating on taxes anyway. I have no way of knowing if they are cheating on taxes or not. All I am worried about is if they are cleaning my house. If they clean the house, then pay them. Are you suggesting that I request their last 5 years of tax returns before I hire somebody?

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Response to phylny (Original post)

Tue Feb 26, 2013, 09:44 PM

38. Many small businesses prefer cash so they don't end up with bounced checks -

- At least, that's been my experience. There are smaller firms who can't absorb a clients bounced check.

Doesn't explain why she wanted the initial check payable to "cash" but may certainly explain why she has requested cash for future payments. Could be that it's just a safety factor for them.

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Response to phylny (Original post)

Tue Feb 26, 2013, 10:56 PM

45. Do the other servants demand cash?

 

Sorry, couldn't resist

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Response to Demo_Chris (Reply #45)

Tue Feb 26, 2013, 11:21 PM

54. Generally,

they pay ME because I'm so nice

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:00 PM

48. I am happy to pay anyone in cash who desires it

These past few years I've been dealing more and more with cash. Its better that way.

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:03 PM

49. Nobody is obligated to accept checks or credit and it's impolite not to mind your own business.

So your response should be to decide whether you want to pay cash or not have their service.

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:10 PM

51. When I pay someone to do something, I pay them in whatever tender they ask, but I generally ask for

a receipt, unless other arrangements have been made.

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:15 PM

52. Cash.

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:17 PM

53. I'd find a different service

...I guess I haven't always looked at it that way, but so much depends on honesty. If someone's running a shady operation, or on the wrong side of that slippery slope, I don't want them in my house.

With that said, the odds of me every paying someone to clean up after me or the family is slim to none. But knowing how important honesty is to a number of our basic human things - not the least being our entire social safety net - I'd steer way clear of scammers.

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:26 PM

55. Everytime you pay cash at the store you don't know if they are paying taxes on it!

Especially mom and pop operations. Unfortunately high taxes on self-employed people makes them want to cheat. 13% of the top for self-employment tax, plus normal income taxes, plus pay all your own health insurance. I don't blame them.

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Response to indie9197 (Reply #55)

Wed Feb 27, 2013, 12:01 AM

64. True, but when I owned my own company and paid all that, I also

was able to deduct a load of things that reduced my wages because I was self-employed.

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Response to indie9197 (Reply #55)

Wed Feb 27, 2013, 02:00 AM

85. Yes, but store transactions generally involve a receipt. n/t

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:35 PM

58. I go for the cash discount every once in awhile. I don't agreee with someone really scamming

on everything but in some situations, I don't blame them. I had to have my girlfreinds truck towed a few years ago. It would have been over $100 but the guy saw I had a couple 50's in my wallett and said, "just one of those will do it and we don't have to write anything up." Fine with me. I suspect it was a situation where maybe both his wife and Uncle Sam didn't need to know about that Grant I handed him.

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Response to phylny (Original post)

Tue Feb 26, 2013, 11:55 PM

62. The response? "Are you sure this is the good stuff?"

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Response to phylny (Original post)

Wed Feb 27, 2013, 12:05 AM

66. Legal Tender



"This Note Is Legal Tender For All debts, Public And Private."

Get a receipt for it. If you don't like dealing with someone this way, find another provider for the service.

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Response to phylny (Original post)

Wed Feb 27, 2013, 12:06 AM

67. It could be as simple as the fact that she had a negative balance at HER bank..

and wanted to take a check made out "cash" to YOUR bank and cash it because she needed the funds to operate the next day....



Peace,

Ghost

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Response to Ghost in the Machine (Reply #67)

Wed Feb 27, 2013, 01:15 AM

72. NOT

a good argument for keeping this company. Those are reasons to say: Ruuuun...find another company FAST!

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Response to JimDandy (Reply #72)

Wed Feb 27, 2013, 01:31 AM

77. Why?? She could have had rubber checks from other clients that bounced..

putting her in the hole. Not everyone is a Romney or Gates or Buffet that has unlimited funds to start a business. Many self employed people used the last of their money to start a business because they couldn't find a job and unemployment ran out, or many other reasons.

MANY small businesses run on a shoestring budget, and two or three bounced checks can put you deep in a hole. I know this from personal experience..

Peace,

Ghost

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Response to phylny (Original post)

Wed Feb 27, 2013, 01:16 AM

73. I get amazed when people are suspicious of you for wanting a cash transaction.

I absolutely hate taking checks in my small, small business. I do if people do not have another way to pay, but for me it is such a hassle to go to the bank, and then the bank waits for 3 days before clearing the checks . I would not assume something shady is going on.

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Response to phylny (Original post)

Wed Feb 27, 2013, 01:21 AM

74. When shit happens as it has, and people are shoved into marginalized society they create

underground economies to survive. Let your conscience be your guide. How much does richie rich have over on us on the graphs these days? Own 90% of everything yet?

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Response to phylny (Original post)

Wed Feb 27, 2013, 01:26 AM

75. Seems like an awful lot of people are worried about how other people pay their taxes....

...but to be honest, it's none of anyone's business how someone else handles their finances.

If someone provides me with a service, I'll pay them any way they want to be paid. If they want to be paid in cash, that's fine with me. I'll keep a record of what I paid (bank statements, ATM withdrawal slips, etc.), who I paid, and the date of those transactions.

I'll take care of my own taxes when they're due.

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Response to phylny (Original post)

Wed Feb 27, 2013, 01:42 AM

81. If she does a great job, pay her in cash as she asked.

 

All you are doing is purchasing a service. She provides the service in a quality fashion and then you pay her. Period. Transaction over.

It's none of your business whether or not she's going to pay taxes.




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Response to phylny (Original post)

Wed Feb 27, 2013, 01:50 AM

82. What is your concern here? And what do you want to do?

Just as she told you that she prefers to pay in cash, you can let her know that you prefer to pay by check (if that is so).

You may, however, have to be prepared for her to tell you that is not acceptable to her.

Figure out your own priorities first, then have a dialogue with her.


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Response to phylny (Original post)

Wed Feb 27, 2013, 08:21 AM

89. If you want them to provide the service,

and they do a good job, you pay them the way they asked to be paid.

Pretty simple.

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Response to phylny (Original post)

Wed Feb 27, 2013, 09:09 AM

90. how about okay?

 

If not for you, use another service.

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Response to phylny (Original post)

Wed Feb 27, 2013, 09:53 AM

93. I pay my cleaning lady

in cash also.

But she does it on her own and doesn't employ anyone else.

Whether she does or doesn't claim the income on her taxes is none of my business.



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Response to phylny (Original post)

Wed Feb 27, 2013, 10:02 AM

94. To be honest...

... whether this service person does or doesn't "pay taxes" is none of your business. This is a service, you have requested and she provided at the rate you agreed upon. Her taxes, are between her and the appropriate government agencies. You are employing her, that doesn't mean you are entitled to stick your nose into her financial affairs. If she wants cash, pay her in cash and demand a receipt. If that doesn't suit you, don't use her services. Whether it "bothers you" or not, is irrelevant.

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Response to phylny (Original post)

Wed Feb 27, 2013, 02:47 PM

97. Very interesting and varied responses, thank you.

So, she came and cleaned - superb job. I didn't see her as I was at work (my husband was at home) and I left cash. I'll talk to her when I can see her in person, and will talk to the neighbor I got the referral from.

So, here's a follow-up question, or maybe just an extension question for extra credit:

If you answered saying it's none of my business if she pays taxes or not (and it is none of my business when you get right down to it) are you okay with carrying the burden for those who do not pay for services through their taxes when you pay your payroll taxes and pay into Social Security and Medicare? Obviously, if she's not paying into SS now, the amount she'll get later is less, but for argument's sake, is it okay with you?

What if a person is making what you make, but is being paid off the books and getting public assistance in the form of help with food, or WIC, pubic housing. Is that okay with you as well?

What if they are collecting disability but working off the books?

I just want to see how far people are willing to pay for those who can pay and choose not to.

For me, I think if you're earning enough to pay taxes, you should. If you're poor or disabled, or struggling in some other way it's my responsibility to help you through my tax dollars and other means. But since I pay my taxes, I think others should as well, otherwise we can collectively afford less as a nation. Also for the record, the rich should pay more, and so should corporations.

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Response to phylny (Reply #97)

Fri Mar 1, 2013, 09:20 PM

109. I'm not the IRS

I'm not ok with somebody cheating on their taxes, but I'm not going to ask for previous tax returns of everybody I do business with. Also, even if you pay by check, they can still cheat on their taxes. If they go to someplace like Walmart and cash the check, its virtually the same as cash anyway. It never goes through their bank account, and it would be very difficult for the IRS to detect.

I'm not ok with somebody cheating on their taxes and being on public assistance, but once again, how do I know what they do with their taxes.

If I hire somebody, I hire them and pay them. I'm not going to ask for 5 years of tax returns before I hire them.

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Response to phylny (Original post)

Fri Mar 1, 2013, 08:58 PM

101. I have been stiffed by checks, usually rich people, so dont assume it has anything to do with taxes

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:03 PM

102. I'm sure there are lots of house cleaning services that follow the law and do a good job

Sounds like this one is a little shading, find someone else.

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:07 PM

106. I would

pay in cash and make sure I get a SIGNED receipt from her. Why is it wrong? People deal in cash some times - and long ago ALL the time.

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:10 PM

107. Are you getting a receipt for services rendered?

This what you need to be most worried about in my opinion.

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:22 PM

110. If you get a receipt, why do you care? Unless it is inconvenient.

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:30 PM

112. That's her business, not yours.

She prefers cash. Then, either do it, or not.

I work with many locals who work cash only here in my very rural area. It's none of my business how they handle it. I am neither meddlesome nor presumptuous enough to be concerned of their motives.

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:41 PM

115. My dentist gives me a discount if I pay her in cash (not checks, not credit card but greenbacks) I

pay her the cash. If she gets in trouble, she deals with it. All I know is I get a receipt for what I paid her to show if anyone questions me.

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:45 PM

116. just pay her cash, let her worry about her taxes

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Response to phylny (Original post)

Fri Mar 1, 2013, 09:46 PM

117. Interesting question.

I can kind of see it both ways. There are plausible reasons why she might prefer to be paid in cash that don't involve tax fraud.

But for those who say "pay for the service and it's none of your business why she wants to be paid cash", I guess I see housecleaning as a question of trust. It would actually take a lot for me to trust someone to be in my house when I wasn't there. And someone who is dishonest in one aspect of their life is likely to be dishonest in another.

So in this particular circumstance, I don't think it's "none of your business" whether or not she is defrauding the government because it speaks to her character and trustworthiness.

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Response to phylny (Original post)

Fri Mar 1, 2013, 10:04 PM

118. Maybe she doesn't have a bank account

One has to be approved to get one these days. Perhaps, she doesn't qualify. Or perhaps, she just doesn't want to pay all those ridiculous service fees to those bankers that are ripping us all off. Maybe she just dislikes banks. Why assume the worst?

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Response to phylny (Original post)

Fri Mar 1, 2013, 10:11 PM

119. I have clients who always pay in cash. Should I suspect they are tax cheats?

They get an invoice from me but always pay in cash. Are they cheats?

Also, there are many businesses I patronize where I always pay cash (because that's all they deal with) and I know they're honest and not tax cheats.

It works both ways.

For me, I don't have any problem with cash only. Or a cash check. As long as I have a receipt and can document MY end, its all good.

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Response to phylny (Original post)

Fri Mar 1, 2013, 10:21 PM

120. If you ever pay for a service in cash get a receipt

You can write out your own receipt if you want and just have her sign it. Ex: "In receipt of X amount of money for house cleaning services rendered on X date." If she refuses to give you her own receipt with her signature or sign a receipt you wrote out then don't pay her in cash because she's doing something shady and you're left holding the bag without proof that you paid her for her services and then she can turn around and claim that she rendered the service to you but you never paid her for it. ALWAYS get a receipt for payment of a service or product when paying cash since it's the only proof that there is to guard against a claim that you didn't pay.

Anyone in business providing a service to customers should automatically be furnishing a receipt to their customers. The fact that she didn't automatically do this and requested being paid in cash is a virtual guarantee that she's not paying taxes, and if she has employees she isn't paying their taxes either and giving them cash under-the-table.

You don't need to file any tax forms for her services because she is not your employee nor did you contract her to work as an independent contractor for you. You are merely one of her customers purchasing a service from her. You wouldn't have a plumber come fix your toilet and file any employment tax forms for his service to you for fixing your toilet, right? This is the same thing - you're her customer, not her employer.

If she has issues with the receipt never use her again. I would never trust someone in my home who runs a shady business. IN fact, if she refuses to sign a receipt then don't pay her in cash but by check made out to her business name (if she has a business name) and in the Memo line at the bottom write in something like "payment for housecleaning service on X date". That way your check becomes your receipt and you can get a copy from your bank as proof should you ever need it.


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Response to phylny (Original post)

Fri Mar 1, 2013, 10:59 PM

122. Who cares if she cheats the government?

 

It's not a multi-million dollar fraud. It's her business, pay her cash. I'm all for her keeping as much as she can.

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Response to phylny (Original post)

Sat Mar 2, 2013, 01:12 AM

125. Yadira

is a life-saver for me. She comes every week, makes our place sparkle and helps me out with my aged dad. She's undocumented and has been in this country most of her life. When we hired her last year, I asked her how she wanted to be paid, and she said check or cash. We give her checks because debit cards make it so much easier to be without cash. What she does after that I don't give a rat's patutty about.

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