I think my employers are evading taxes or something shady

[histguy86]

I work for a doggy daycare in Virginia. One of the services that they say they offer is Petsitting. They charge petsitting i50$ a night where I would keep 30 and the company gets 20 of it. The thing I feel uncomfortable about is that they have the clients write the check directly me and not the company and then I just bring them their portion of the money in cash. We dont have an employee handbook and theres no log to record when we've paid the company their portion of the petsit. When I first started I asked if the clients could just write checks to the company and I was told no because it was just easier the other way. Something just doesnt feel right but I have no idea if I'm just being paranoid. Thanks!

 

[Taxing Matters]

I work for a doggy daycare in Virginia. One of the services that they say they offer is Petsitting. They charge petsitting i50$ a night where I would keep 30 and the company gets 20 of it. The thing I feel uncomfortable about is that they have the clients write the check directly me and not the company and then I just bring them their portion of the money in cash. We dont have an employee handbook and theres no log to record when we've paid the company their portion of the petsit. When I first started I asked if the clients could just write checks to the company and I was told no because it was just easier the other way. Something just doesnt feel right but I have no idea if I'm just being paranoid. Thanks!

It’s unusual and suggests there may be some problem here. Particularly if the owners are insisting that you pay the $20 in cash. That may indicate a scheme to hide income, either from tax agencies, from creditors, from an ex seeking child/alimony, or whatever. Are you treated as an employee with the employer withholding tax on your $30 of income?

 

[histguy86]

It’s unusual and suggests there may be some problem here. Particularly if the owners are insisting that you pay the $20 in cash. That may indicate a scheme to hide income, either from tax agencies, from creditors, from an ex seeking child/alimony, or whatever. Are you treated as an employee with the employer withholding tax on your $30 of income?

I think so, like it doesn't show up on my pay stub or anything. They also do this with walks. People get paid 15 and have to give 5 back. They just fired a girl because she didn't pay them their portion on a dogsit.

 

[LdiJ]

I think so, like it doesn't show up on my pay stub or anything. They also do this with walks. People get paid 15 and have to give 5 back. They just fired a girl because she didn't pay them their portion on a dogsit.

Its not an "I think so" situation. Either you end up with less than 30.00 because they withhold tax, or you keep the full 30.00 and they do not withhold tax.

 

[histguy86]

Oh ok sorry yea no they don't withhold the 30 at all.

 

[LdiJ]

Oh ok sorry yea no they don't withhold the 30 at all.

Ok, then they are treating you like a contractor, and that counts as self employment, which means you will have to file your taxes as a self employed person. Since the customer makes out the check to you, that means that you have to report the entire $50.00 on your tax return. However, since you are paying your "employer" in cash, you have no record of paying them and therefore it will be a problem for you to deduct the $20.00 paid to them.

You need to either start giving them checks, or insist on them giving you a receipt for each payment.

 

[histguy86]

Ok, then they are treating you like a contractor, and that counts as self employment, which means you will have to file your taxes as a self employed person. Since the customer makes out the check to you, that means that you have to report the entire $50.00 on your tax return. However, since you are paying your "employer" in cash, you have no record of paying them and therefore it will be a problem for you to deduct the $20.00 paid to them.

You need to either start giving them checks, or insist on them giving you a receipt for each payment.

Awesome I'll start doing that. Thank you so much for all of your help!