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Cowgirl Lawyer
Cowgirl Lawyer, Lawyer
Category: Employment Law
Satisfied Customers: 1422
Experience:  Attorney for 22 years. Labor and Employment. Former Administrative Law Judge.
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How can I pay my employees cash and remain legal

Resolved Question:

How can I pay my employees cash and remain legal?
Submitted: 8 years ago.
Category: Employment Law
Expert:  Cowgirl Lawyer replied 8 years ago.
HelloCustomer

Thank you for choosing JustAnswer.

You do not have to pay an employee by check. Payment by check provides you with some extra protection, however. If you pay by check you have a paper trail and proof of payment if you are ever challenged.

However, there may be reasons that you want to pay in cash, particularly if you have workers who do not have bank accounts and who want immediate payment for services rendered. To remain legal you do have to withhold appropriate taxes. You will need to provide the employees with documentation about their pay and withholding. And, you will need to file the appropriate withholding with the federal and state governments (and, is some areas, the local government).

You will need to pay for any required unemployment insurance, in addition to tax and Social Security withholding.

For federal tax issues, you may want to refer to the IRS website for small business owners. They have a section there on dealing with employees, along with other information of use to the small business owner.

http://www.irs.gov/businesses/small/index.html


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Gloria M

Please be aware that my answer is not legal advice, it is merely informational and educational. Fees I receive for answering questions are paid for information, not legal advice. This forum is designed to provide only general information, to give you a basis of knowledge. You and I have not entered into an attorney/client relationship, and I am not responsible for your legal rights. The only way for us to be in an attorney/client relationship is if you have signed a written retainer agreement with my law firm, and I am only licensed to practice law in Illinois. You should consult with legal counsel in your area for specific information relevant to your situation.

Customer: replied 8 years ago.
as a restuarant/bar owner under what circumstances am I allowed to require my employees to be responsible for their own taxes/ in other words issue them a 1099?
Expert:  Cowgirl Lawyer replied 8 years ago.
HelloCustomer

Generally speaking, a 1099 is not for filing wages. It is for reporting amounts paid to contractors and others who are not direct employees. Indeed, in the instructions for the 1099 form, it directs employers to the W-2 form for employees.

I will be happy to clarify my answer if you need me to do so, or give you further explanation if you don't understand. If not, please click ACCEPT to pay Just Answer and me for helping you. Your positive feedback wins me points and costs you but a moment of time. A "bonus" awards me for an especially good job.



Next time you visit Just Answer, please ask for me by name by starting your question with "For Gloria M."

Good luck and best wishes!

Gloria M

Please be aware that my answer is not legal advice, it is merely informational and educational. Fees I receive for answering questions are paid for information, not legal advice. This forum is designed to provide only general information, to give you a basis of knowledge. You and I have not entered into an attorney/client relationship, and I am not responsible for your legal rights. The only way for us to be in an attorney/client relationship is if you have signed a written retainer agreement with my law firm, and I am only licensed to practice law in Illinois. You should consult with legal counsel in your area for specific information relevant to your situation.


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