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Discussion in 'Business Operations' started by kinglin, May 23, 2008.
Being an LLC with only one employee, can I pay them in cash and avoid payroll taxes.
Sure, go for it if you want to spent 10 times the amount in fines!
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.
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.
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.
You must be joking... you're asking this question...
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.
You're missing the point. He's wanting to "avoid" payroll taxes.
You can't do that legally!!!
Ha! He wants to avoid paying payroll tax, and you think he's reporting his income or "profit" ?
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.