Getting paid under the table may seem like a win-win situation. You don’t have to keep track of your income, and even better, you don’t have to report your income to the IRS. If you don’t report your income, then you don’t have to pay taxes – what could be better than that?
However, getting paid cash under the table comes with its own problems. Here are three things you need to keep in mind.
1. Your Employer May End Up Telling The IRS About Your Arrangement
Just because you’re getting paid cash under the table does not mean that IRS won’t find out. Here is why. Sometimes businesses get audited. If they get audited,they may have to tell the IRS what or who they spent their money on.
You may ask yourself, would my employer sell me out? That is hard to say, but if you think that is possible, you may want to keep a record of your cash income. You may even want to report it because otherwise, your employer could get you in trouble.
2. Why Your Employer May Tell IRS About Your Arrangement
If your employer gets themselves in trouble, they will have to tell the government how they have been spending their money. If they spent their money paying you cash under the table, they might have to tell the IRS about it.
They may not want to sell you out, but in the end, being honest with the government will save them money and time. Telling on you is going to benefit them.
3. Not Reporting Income Can Result in Jail Time
Unreported income can be a federal crime. If caught, you could face additional taxes, penalties, and interest. In extreme cases, you could face jail time.
You need to consider these things when being paid cash under the table. It can seem like a perfect setup initially, but are the consequences worth it if you get caught?
