Paying an Employee with Cash

Discussion in 'Business Operations' started by kinglin, May 23, 2008.

  1. kinglin

    kinglin LawnSite Member
    from Midwest
    Posts: 12

    Being an LLC with only one employee, can I pay them in cash and avoid payroll taxes.
  2. corbster

    corbster LawnSite Fanatic
    from OHIO
    Posts: 29,511

    Sure, go for it if you want to spent 10 times the amount in fines!
  3. HandyHomeMedic

    HandyHomeMedic LawnSite Member
    Posts: 61

    Dude, I'm a one man LLC too. I paid a nice chunk of change to become one and more to become an insured one and more still to have my contractor's license. What if that person gets injured? You can do whatever you like. Hell go get some Mexicans if you really want to save some cash!

    I'm a full time Paramedic. I can't tell you how many times a pick up truck drops off some Guatemalan covered in blood or fainting from heat exhaustion and the truck tears out of the driveway.

    Too many cameras, cell phones and wanna be roving reporters out there. If you value what you've started, you'll protect it like you would a new born baby.

    Hope this helps.
  4. Gene $immons

    Gene $immons LawnSite Bronze Member
    Posts: 1,028

    Remember, payroll tax is tax deductable. If you pay employees in cash, your net profit will also appear higher, causing a larger federal tax bill April 15.
  5. Lawnworks

    Lawnworks LawnSite Fanatic
    from usa
    Posts: 5,407

    How are you paying him cash? Is it cash you get off the jobs or are you getting cash at the bank? In my state, w/c is not required unless you have 3 employees. In reality the guy you are paying cash is actually saving 20% in taxes, but he will probably get back 95% of that. It is saving you about 15% in ss and medicare. I can understand where you are coming from and you could probably get away w/ it, or you could take out taxes and just ended up paying him roughly $2 an hour more taking taxes out an have peace of mind.
  6. DuraCutter

    DuraCutter LawnSite Senior Member
    Posts: 806

    You must be joking... you're asking this question...:dizzy:

    All I can say is either the bulb is dimming or you are really clueless.

    At this point, I'd suggest attending class at night for business or talking to the elders in your area. I'm guessing you're younger, if you're older, you should know better.

    Good luck and I hope you don't learn the hard way.

  7. DuraCutter

    DuraCutter LawnSite Senior Member
    Posts: 806

    You're missing the point. He's wanting to "avoid" payroll taxes.

    You can't do that legally!!!

  8. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Posts: 2,419

    Ha! He wants to avoid paying payroll tax, and you think he's reporting his income or "profit" ? :laugh::laugh::laugh:
  9. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Yes, you can pay any one hired worker UP to $600 a year without declaring it.
    Now you could get smart and decide to hire one after the other, but I might advise against doing that.
    Instead, use this little window of opportunity to find out if employees is what you really want.

    And you MIGHT can get away with up to a $1,000 if your helper can declare it as a hobby, but I'm not sure on the tax laws as this is from 8 years ago... Best advice is stay LOW on your total / year and under 600 would really be best, until you can get your stuff together a little better, and I would only use one worker this year if you get my drift it is best to not play games with the IRS, all right good luck.

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