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Is this legal? - Sure as long as YOU report the income. It doesn't matter how you get paid, in cash, check, Paypal, gift certificates, whatever you want to accept as payment does not make it non-taxable.
The last thing that you want to do is to agree to do something illegal and be a party to it. What your "client" is looking for is a discount because he wants to pay you in cash so there's no record of you receiving the money and then if you join the so-called "Underground Economy" & not report the income, you are risking a lot in terms of the trouble you could have. He on the other hand is doing nothing wrong because he's the one who is doing the paying; you will have done nothing wrong until you fail to report it on your income tax return for the year that you receive the payment, no matter what form it is in.
If your business is slow and you want to give this "client" a discount, then do it & report the income just like you would any other income.
Don't "get into bed" with some stranger (or anyone else) or you can bet it will be your luck that it comes back to haunt you.
So eventhough I own a business, I can also get paid as an individual (non business owner related)?
Do I have to report less than $500.00 a month as an individual?
Yes, it is self-employment income.
How does your company report?
Is it a corporation, sole proprietorship, what?
My Company is an S-corp. I'm the only member on it. I do business in VA only.
The client who wants to pay me as a person, is in Washington, D.C.
I'm not sure about something, if I'm registered as an S-corp to do business in Virginia, how can I get paid to do a job in Washington D.C. not as a business (S-corp)(instead personal) but put the funds in my S-corp company?
No I'm not planning to register to do business in Virginia as an individual.
But I do have my S-corp in VA.
I'm planning on posibly doing several jobs for this client who's office is in Washington D.C.
Could I just charge him as an individual and then just report the extra income when I do my taxes.
So even if I don't make a ton of money I still have to report it?