Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

For Virginia and/or DC tax people. Hi I have a "one man

For Virginia and/or DC tax...
For Virginia and/or DC tax people.

Hi I have a "one man band" consulting company.
I have a client who can't afford me :-(
He asked if I could charge them less and do it under the table.
1. Is this legal?
2. If it's ok, is there a limit? A maximum amount?
3. Can I get paid with a check or paypal?

Thanks
Show More
Show Less
Ask Your Own Tax Question
Answered in 16 minutes by:
1/2/2013
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,211
Experience: Extensive Experience with Tax, Financial & Estate Issues
Verified

Stephen G :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything that is not clear.

Stephen G :

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.

Stephen G :

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.

Stephen G :

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.

Stephen G :

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.

Customer:

So eventhough I own a business, I can also get paid as an individual (non business owner related)?

Customer:

Do I have to report less than $500.00 a month as an individual?

Stephen G :

Yes, it is self-employment income.

Stephen G :

How does your company report?

Stephen G :

Is it a corporation, sole proprietorship, what?

Customer:

My Company is an S-corp. I'm the only member on it. I do business in VA only.

Customer:

The client who wants to pay me as a person, is in Washington, D.C.

Ask Your Own Tax Question

If your client pays you the way you describe, you would need to file a Schedule C with your personal income tax return to report the consulting income. The better way would be just to deposit the money in your S-Corp just like any other income you receive. It should not make any difference to your client, and in fact there's no reason to even tell him. Just deposit the funds in the S-Corp and report the revenue just like anything else.

If you need to contact me again with any tax or financial questions, you can just ask for "Steve G" at the beginning of your question. Again, please remember to rate my response. Bonuses, where you think they are warranted, and excellent ratings, are always most appreciated. Thanks again for using JustAnswer.com.
Ask Your Own Tax Question
Customer reply replied 4 years ago

Hi,


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?


 


Thanks


Were you planning to register to do business in Virginia as an individual? As long as you haven't established an office in Virginia and set up a permanent place of business, performing an isolated engagement in Virginia and depositing the revenue in your S-Corp should not be a problem.
Ask Your Own Tax Question
Customer reply replied 4 years ago


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?


Yes you can charge him as an individual (as noted above)& then file a Schedule C with your individual income tax return.

Yes all of the income is required to be reported "even if you don't make a ton of money".

The income will be subject to both income tax & self-employment (social security) tax.
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,211
Experience: Extensive Experience with Tax, Financial & Estate Issues
Verified
Stephen G. and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Stephen G. Your Own Question
Stephen G.
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,211
7,211 Satisfied Customers
Experience: Extensive Experience with Tax, Financial & Estate Issues

Stephen G. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I am completing my personal income taxes. For this filing
I am completing my personal income taxes. For this filing year, I left my corporate career to manage my real estate full time. Therefore, the real estate is moving from a passive activity to an active… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Filed W1040 for self-employment. Should I file amended return for HSH?
I was self-employed last year and I filed a W1040 tax form. Everything went through well. I did it through an H&R computer program. Currently I am in need of financial aid as I am going to college. I … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Self employed person (no employees) was set up for automatic
Self employed person (no employees) was set up for automatic monthly contributions to her SEP plan during 2016. When she prepared her 2016 tax return in April 2017, her CPA determined that there was a… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am a personal injury attorney doing a schedule c as we
I am a personal injury attorney doing a schedule c as we speak. . … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I had some self employment income where I was paid in
I had some self employment income where I was paid in bitcoin. I also made some bitcoin payments to a couple of businesses for what would be considered commissions. Would I report the income and expen… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Small schedule c business donates fully depreciated
small schedule c business donates fully depreciated furniture to charity. They've been told that the FMV is $1,000. What is the deduction for contributed property? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Income from the leasing of cars...is it self employment
Income from the leasing of cars...is it self employment income? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Adjusted individual tax return for 2014(Iowa),says no
Adjusted individual tax return for 2014(Iowa),says no response to letter of inquiry,disallowed health insurance. deduction.says my wife and I owe$600.00.she called # and was told to show proof of insu… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
NYS can collect personal income tax for 20 years? But the
Hi - So NYS can collect personal income tax for 20 years? But the Fed can only collect for 10? … read more
abci168
abci168
Principal
27 satisfied customers
How do I request my 2016 Individual Personal Income Tax form
Sir, how do I request my 2016 Individual Personal Income Tax form (form 1040) on line? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
What is the income tax rate if it is not withdrawn from the
Hi! What is the income tax rate if it is not withdrawn from the LLC? The owner has not withdrawn any balance from the business all the amount reinvested into the business. Thank you!… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,466 satisfied customers
A taxpayer, Form 1040 Schedule C, is on the cash basis. The
A taxpayer, Form 1040 Schedule C, is on the cash basis. The average revenue for the last 5 years is $5,100,000. There is no inventory. The NAICS is 423600Can he remain on the cash basis?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have a client who has overseas self-employment income. It
I have a client who has overseas self-employment income. It is my understanding that this income cannot be excluded from his taxes because his main home was in the US? Is that correct? Also would he q… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
How can i find my missing schedule c form, Hewitt did my
Jackson Hewitt did my taxes and i dont have my schedule c form. How can i get a copy of that … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
Does any experts know that self-employment tax rate? my
Does any experts know that self-employment tax rate? my friend got his real estate broker license and recently close the one case. for example, he got a $15,000 commission from escrow company and How … read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
285 satisfied customers
Is a 1040 US Individual Income Tax Return federal income
Hi Is a 1040 US Individual Income Tax Return federal income taxes owed to the US government? Or is it FICA? I received a letter owing some back taxes and since I'm a priest with a weird set of tax exc… read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
682 satisfied customers
A PERSON HAS A NET INCOME FROM SELF EMPLOYMENT OF $16,000
A PERSON HAS A NET INCOME FROM SELF EMPLOYMENT OF $16,000 BUT TAXABLE INCOME OF $0, CAN HE STILL CLAIM EIC HE IS MARRIED AND HAS AN 8 YEAR OLD DEPENDENT.… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Problem with self employment tax. On a farm rental return
problem with self employment tax. On a farm rental return form 4835, which is a cash rental the 1040 keeps computing self employment tax. … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x