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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Hello! I was paid cash for some part time work to help a business

Resolved Question:

Hello! I was paid cash for some part time work to help a business out and he wanted to "pay me under the table" at the time. He never had me fill out any tax forms. Now he tells me he is catching up and is reporting what he paid me over a year later. He is filing a W2 now. Now I don't know what to do. I know I probably will get in trouble for not claiming this as income on my taxes, but does he have any liability for not giving me a W2 for over a year and plus not asking me what I want withheld for taxes? (if he even did). What is the best way to handle this? Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello, thank you for your question. My name is XXXXX XXXXX I will be happy to help you tonight

Megan C :

How are you doing?

Customer:

Doing well, thank you!

Megan C :

Unfortunately, regardless of whether or not you received a W-2, this amount should have been claimed as income on your taxes. You will have penalties assessed for underpayment of taxes.

Megan C :

Your boss, on the other hand, will have siginificant penalties because he did not timely file or remit payroll taxes.

Megan C :

He will have steep penalties to the IRS for this

Customer:

so if I have penalities, does it make sense he should pay them? What about not asking for my withholding?

Megan C :

Unfortunately, he would not be liable for your penalties because you still should have claimed the taxes regardless.

Customer:

Are the penalities stiff for me? What if I disagree how much he says he paid me?

Customer:

What about the withholding? Don't I have a choice what that will be?

Megan C :

The penalties aren't that bad for you. And your withholding just deals with how much money is put back for taxes at year end. You do have a choice to a certain extent, but it wouldn't matter after the end of the year when you paid your taxes.

Megan C :

If you disagree with the amount that he says he paid you, you would need records proving what he did pay you and all you would do is claim that amount as income and show the IRS your records showing what you were paid.

Customer:

he also said I could now claim unemployment for the time after I worked for him,,,does this make any sense?

Megan C :

If you were laid off, and were not working then yes - you would be unemployed

Megan C :

He is now getting current with payroll taxes

Customer:

but does unemployment pay a year later for that period of time?

Megan C :

No you would not typically get retroactive unemployment. You could always try and file, but I've never heard of that

Customer:

me either

Megan C :

I guess it wouldn't hurt to apply just to see. Worst case they say no and you're still the same as you are now.

Customer:

yes, true. I thought if a person made less than $8500 they don't have to file, is this true?

Megan C :

What year are you talking about? (it depends on the year I'll have to calculate)

Customer:

because I didn't

Customer:

2012

Megan C :

If you made less than the standard deduction and personal exemption then you're fine

Customer:

sorry I don't understand that.

Megan C :

If you made less than $9750 then you do not have to file

Megan C :

So, if you made less than that you have nothing to worry about. There will be no penalty and no tax due

Customer:

and if he reports I made 12,000 for example, I just have to file for $2250 of income? (I dont know what he reported until I get the w2)

Megan C :

Yes, that would be correct and your tax would be very low...like $225

Customer:

ah whew but does the irs put me in a bad catagory?

Megan C :

No. They are not worried about that little amount

Megan C :

You have nothing to worry about. You should be in good shape

Customer:

ok that helps. If I have another question after I meet with him and get my w2 can I get in touch with you again?

Megan C :

Yes, just come back to this page.

Customer:

ok

Megan C :

But, before you leave tonight please rate me positive so that I can get credit for assisting you today

Customer:

you've been great of course I will

Megan C :

Thanks so much!

Customer:

welcome thank you.

Megan C :

The rating feature is along the bottom of your screen and 3-5 stars/smileys gives me credit

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 2 other Tax Specialists are ready to help you

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Megan C
Megan C
8219 Satisfied Customers
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level