foxymoron
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shhhhhhh, its cash there is no way to track this.... if he were to pay taxes he would have to get a business liscense and all that mess......
i see it as no different from girls getting to babysit and keep the cash... also hes providing a service, in some states you cant tax that
and how lucky you are to have that office open those hours, state agencies never are open like that... |
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Skandalouz
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Hi, if he is making all that money in cash (tax free) you do not need to include that on your taxes!!! This is not the same thing as being self-employed. Take advantage of it. |
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voluntarheel
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Hmmm...very gray area here. You really need to talk to an accountant or tax advisor who is a friend. The reason I say this is because you need special advice. Like other have said this is sort of an "under the table" business. In other words he's paid in cash and there isn't much here to report. But legally he has to pay taxes and you don't want your son getting caught and having to suffer consequences (whatever that may be). In other words you want to talk to someone who knows the law, but also knows the liklihood of whether or not he'll get caught.
But I have to say your son is very industrious, he's doing what it takes to make money - I love that attitude. Now if only I can find my electric screwdriver.... |
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Good Grief
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Congrats on your sons success. When it comes to cash there is no tax. Tell your son to keep up the good work. And dad be proud of your son that he is making an honest living. |
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William H
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Yes, he needs to keep records of his new business. Yes, he needs to report the income.
This is a good time for him/you to open up a Individual Retirement Account since he has earned income. He seems to be a resourceful kid and you could really help him by funding the account and he could take the write-off.
Congratulations on raising a fine individual. |
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rockyfella25
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no noone has to pay because it's like under the table..no ss# number filed and he wont get a w2 form//you would have to pay if you were on a payroll or he was getting a w2 |
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tiescore
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First off tell your son he's the reason I still have faith in America. Just look on here in Personal Finance at all the people whining on how to get rich or make quick money without putting forth any effort. Your son is doing!
I found this on the web about the child income tax rules: http://www.uscg.mil/Legal/la/topics/tax/childrenstax.html That should cover your main question.
Now you need to teach him the next step in being an entrepreneur (since he's got the salesmanship and drive skills going already).
He'll need to do a little bookkeeping:
He should get Quicken to set up his books on the computer, or a ledger if he wants to keep track by hand and a book on basic bookkeeping. He'll need to record his business activities, so he can provide you with his gross income & expenses for his tax return.
Have him dig out that receipt to see how much he's paid out and try to back track what he's earned so far.
Good time to to teach him about investing. Have him read a few posts on here about the money problems college students are having.
Some other recommended reads, The Millionaire Next Door, a book on Personal Finance & The Richest Man In Babylon.
Your son has tapped into a great source of cash for someone so young. If he can set some aside now he'll have a lot less to worry about later and he may have that enterpreneurial drive and do something really amazing. |
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donna_honeycutt47
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Until he starts receiving a W2 Form or 1099, I would not worry about it. I Think what hes doing is a wonderful thing to help the Elderly. I wish more Teenagers had that kind of Drive. Don't worry about paying Taxes on his well earned cash. The time for that will come soon enough.. |
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jhunter
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That is an amazing idea. I say you two should open up your own business and make a killing! |
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Tapestry6
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Well he has no receipts.. no paperwork... there is no 1099.. and its not like he is keeping books. So there is really no way he is going to get dinged for a part time job at the age of 14.
But I doubt seriously that 35-50 people a day are asking him to put on the new plates per day, in a small town. It almost sounds like he is bragging. |
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rwa000
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if it is cash, it will not matter, unless he reports it when he does his income tax. Then he will ahve to SS and withholding, better you keep it to yourself |
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Nataly D
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I dont think you have to file a tax return if they pay him cash. If you dont tell about it on the tax forms the tax people are not going to find out about it. |
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Diane M
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What an enterprising kid. He will go far in this world. Legally he is supposed to be reporting all his earnings to the IRS but chances of him getting caught are pretty slim unless he has been running his money through a bank account. Why not just start up a legitimate service business next year and do things the right way. This will make a great entry on his resume or college application. Wish more kids were as willing to be creative and work for what they want rather than just expect their parents to provide it all. |
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The Professor
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Well, you've raised an enterprising individual. Now the question you are asking is do you want to raise an honest individual?
The cash he is collecting is income. He is required (by federal law and probably most state laws) to report the income and pay taxes on it. As many people have pointed out, the fact that he collects cash means he probably won't get caught if he doesn't pay taxes. But this is dishonest...which many people answering this question don't seem to have a problem with.
Your call, but I'd want my son to be an honest person as well as industrious. |
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stephenweinstein
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He is required by law to file and to pay taxes. That he is being paid in cash makes it less likely that he will be caught if he illegally fails to report the income but does not affect whether he is required to report it. This is self-employment, which means that he is required to file a Schedule SE and either a Schedule C or a Schedule C-EZ and to pay federal taxes.
Also, he may (or may not, depending on the state in which he is working) be required to charge his customers/clients sales tax and/or obtain a license from the lcoal government and/or pay the license bureau rent for the part of its parking lot that he is using and/or pay some state or local taxes. |
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hollyncollege03
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It depends on your state, and who the atv is registered under.
If it's you, it will have to be listed as an asset. You could always say it was a gift..since you didn't buy it. Good Luck |
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footballgirl
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My parents never had to pay taxes when I made bundles for babysitting. He isn't running a business. I'm sure no one ever asked him to provide a receipt.
He's a smart and lucky kid. I hope he keeps his great work ethic up! |
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bellababi44
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no i dont think you have to file taxes but are you sure that is where he is getting all of his money?? you stated its a very small town but 50 people a day need licence plates put on hes charging 5 dollars each person and making 13-1500 a week thats alot of people a day for such a small town and thats not counting the ones who put the plates on themselves |
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SCH
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Technically yes he needs to file an income tax return...but also, your babysitter who you pay $20 to every two weeks to watch the baby so you can go to dinner should be filing a tax return too.
There is no record of him making this money except for the purchase of the 4x4. The government is not going to come after you or him for the money. It is the equivelent of him mowing lawns. The people who paid him aren't going to report the money they paid to the government...so I would not worry about reporting the income. |
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Mayor Quimby
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Of course he has to pay taxes. There are no free earnings. |
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Ask M
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wow good for him and what a great idea.
Guess you better talk to your tax man |
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Cindy B
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yes he has to pay taxes. |
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Studly
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The income is not reported, so why bother paying taxes on it. It's the American way.
His next step is to hire employees, franchise his business, and expand. Then he can deal with corporate taxes, employment and workmans comp taxes, capital gains......
Until then......keep is quit! |
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girlajeepin
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My opinion would be no, he does not have to pay taxes because he is a minor. I would advise to call the internal revenue service just to double check. You dont have to give your name. Better safe then sorry! |
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