I’ve got a unique situation I am not sure how to handle. I have a retired gentleman who recently started working for me part time. We’re talking a day a week or less. He strongly prefers to be paid in cash. I talked to my insurance and they told me he is covered as long as I claim him on the annual audit. Are there any issues with paying him this way? Anything special I need to do tax or accounting wise?
Consult your CPA. I can’t see how this is a good idea. The guy can cash a check if he wants doesn’t want direct deposit.
Does he mean he wants to be paid under the table, cash only with no reporting to the IRS? That’s a slightly different issue than if he wants to be run through the regular payroll process - taxes paid and withheld - but instead of a check, receive cash.
You can’t claim the expense as a write off so just know you will be footing the bill for his taxes.
Another way to look at this: I get paid cash for random transactions throughout the month. Consider it a petty cash account that covers costs such as this. I have a few vendors who only take cash.
One day a week. Cut the man some slack and just pay him cash. If he is retired and working for cash. He needs to keep extra income hidden
Agreed. There are some ridiculous laws in regards to the extra income retirees are allowed.
Would guess has to do with social security payments as they can only work so many hours. When I have to pay someone in cash, I record it as day labor in my books. That way still recorded where a 1099 Misc isn’t needed.
Can he still get a payroll check that he signs back over to the company that then pays him the cash amount.
I wish any of my employers, ever, cared how I preferred to be paid
It’s not my choice as an employee
I pay guys cash regularly. Send them a 1099 if over the limit. It is then their job to file it or throw it away.
There’s no upside to you for paying him off the books, unless you’re also running the business that way.
Offer to pay cash, but remind him he’s still getting a W-2 for it, and I imagine he’ll change his tune.
He’s retired and works 1 day a week. Dont fuck with the guys pension. Let him go if that’s the way you roll. Give the old guy a break
Honestly as long as you pay him out of your pocket, who cares. Let the guy work that one day and have a pleasant retirement. The last thing anyone would want to do is jeopardize his retirement pension.
Or Medicare. I have an elder family friend who worked as a security guard/custodian at the same commercial building for 25+ years. When he retired with no personal assets, the building owners retained him to work part-time under the table. If his current income gets reported, he would lose Medicare coverage and have to pay out of pocket for lesser quality health care. He’s making $12 cash/hr. and buys groceries/clothing sometimes for some homeless people in his work area which he has befriended over the years.
The reddit collective would bury this guy. They should be embarrassed for themselves.
The reddit collective would bury this guy. They should be embarrassed for themselves.
For real… this site is often full of people who occupy some weird non reality where breaks don’t get given and compassion doesn’t exist. OP will never get caught doing this lol
Exactly. We have a older woman that works for us one day a week and we pay her cash. Why create a hassle for someone that just needs a little extra spending cash.
While I agree that I wouldn’t want to jeopardize his pension, that’s also his problem. Why should I take on a massive risk of legal liability because this guy wants to make a few more bucks on top of his pension?
If you get caught paying under the table, you are looking at big fines, getting audited every year, and higher work comp rates for the foreseeable future. It’s all risk and no reward for you.
Then like I said let him go. Don’t give him a surprise at the end of the year.
Pay him from the petty cash jar as a donation as he is a volunteer.
Assuming he works for less than someone who doesn’t have a pension, so that’s a benefit for you.
The benefit for him is getting paid in cash.
My understanding is that if you pay him cash you can’t write off the expense.It’s not technically legal, but taxing a senior citizen for his labor shouldn’t be legal either.
I think you could send him a 1099, then it’s up to him whether or not to file it or whatever it’s called. He almost certainly will never get audited unless he’s a high income earner or has irregularities, which I doubt he would.
Pay him in cash, reimburse yourself as mileage every month for the amount you paid him.
Could you just 1099 him at the end of the year? I don’t think he has to pay taxes for anything less than 12k a year so he should gave to reason to stay off the books
Pay him in cash, reimburse yourself as mileage every month for the amount you paid him.
Could you just 1099 him at the end of the year? I don’t think he has to pay taxes for anything less than 12k a year so he should gave to reason to stay off the books