Cash, check or . . . . .

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  #1  
Old 07-23-11, 05:57 PM
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Cash, check or . . . . .

Yesterday I had a contractor remove 4 trees from my front yard. Last week I had a guy come and remove a 30 yard pile of dirt. In both cases I was quoted a price and when I asked for a cash price I got a better number.

My wife thinks that is bordering on criminal by helping a guy avoid taxes. I think that the guy that took down my trees is running a business. He has 3 full time employees that are working for a living.
What he does about taxes is his business but I would rather see my money go to him than to go to some overpaid parasite government flack or a government program that feeds tax money to people that have never worked a day in their lives.

I'm just curoius if anybody else looks for a cash price.
 
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Old 07-24-11, 04:04 AM
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All I need is to have the IRS on my back checking into the improprieties of my business. While it may be nice to dodge the bullet on cash jobs, IMO it ain't worth the possible hassle down the line. When I performed work for my mother, I logged it in Quickbooks, even though she insisted on paying cash. I could just see an IRS agent sitting across from me when I probated her will. Naaaa.
 
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Old 07-24-11, 04:51 AM
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Wayne, your wife is probably right although I've also been guilty of offering cash to save myself some money. Like Larry, when I was in business, I was too nervous not to include the cash jobs as income.
 
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Old 07-24-11, 08:41 AM
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Originally Posted by Wayne Mitchell View Post
My wife thinks that is bordering on criminal by helping a guy avoid taxes.


I'm just curoius if anybody else looks for a cash price.
it is criminal = tax evasion. but, it is criminal what the government does with some of my money.

so, if cash will get me a better deal ........
the way i see it = its them or me . and they certainly don't care about me, other than i keep payin.
 
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Old 07-24-11, 09:04 AM
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I am with condo owner. While I don't cheat on my taxes I really hate paying them when I see where the money goes. I don't see a responsible contractor fudging to the IRS but the state money grubbers are a different matter.

I live in a state that is third highest in the country for taxes. It is 46th in the country for fostering a business environment and 2nd or 3rd in the country for gas prices. Unemployment in the state is over 9%. Yet I read today that the average wage for a state employee is just under $70,000 annually and their perk packages are unreal. The state has many, many employees and no politicians have the bells to cut the size of the state labor force. Poor people come here from all over central America because of the welfare system. It's very difficult for small business guys in the HIC/Landscaping business to compete with the illegal alien competition.

My position is that if a guy offers me a better price for cash work, who am I to assume that means he won't pay taxes.
 
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Old 07-24-11, 09:45 AM
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I've found it's pretty common for smaller operations to work that way. When I had a block retaining wall built there was a 10% discount offered for cash (I didn't do it, I wanted a paper trail). Heck, he probably left here with the check and went to my bank 2 blocks away anyway...lol. When I moved back to my place in VA after renters and my Ex had lived there for 3 yrs, the locksmith straight off said $10 per cylinder cash, $15 per for any other method.

Matter of fact..when I drove a tow truck in Long Beach part time when I was in the Navy, the manager told us right up front...for jumps, lockouts, flats, tows under a certain distance, etc...if they weren't AAA (our main customers) the rates were lower for cash. Tows that took us out of area also had to be cash if they didn't have 2 IDs and a residential address. No worries about checks bouncing or any of that. Of course thats IIRC, it HAS been 32 yrs.
 
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Old 07-24-11, 12:25 PM
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I sometimes quote a slightly lower price for jobs if payment is cash - including checks - vice credit card. It's all claimed income, but when I don't have to pay out the credit card processing fee on a transaction at the end of the month, I pass that on to the customer. It's not a lot (at about 6% fee, but sometimes more depending on how I round it off; plus, I avoid the time spent running the card). People appreciate it and anytime I can put money in a customer's pocket vice the credit card processor, I do it.
 
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Old 07-24-11, 12:59 PM
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IMO, there is nothing illegal about asking for cash or offering cash as a payment, it is still a legal form of payment. About 20 years back a building went up across the street from mine and they brought in a crew of steel workers. When payday came, the cash wagon pulled up and they all got paid, in cash, it was in their union contract.

As for offering or asking for a discount, cash is a done deal. No chasing bad checks, no stopped payments, no holding time before the funds are available, it's yours and it shows up immediately in your checking account. Just get a receipt.

The issue of legality for the transaction that falls on the shoulders of buyers and sellers separately and in most cases is totally independent of the method of payment. As for following the rules and paying those taxes, that's a much longer thread.

Bud
 
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Old 07-24-11, 03:31 PM
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When you mentioned the cash wagon I flashed back to my first overseas assignment, circa 1975, Iwakuni, Japan. On payday, the officer designated paymaster for that day went around to designated locations in each unit with an ammo can full of cash (and a .45 full of ammo) along with a pay roster. You stood inline, got your pay, and signed by your name on the roster.
 
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Old 07-24-11, 05:10 PM
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I don't have any problem at all giving a "discount" for using cash as opposed to credit/debit cards. It costs the retailer money to complete each transaction, so discounting it by that percentage makes perfectly good sense.
Our per diem pay when I worked (winter of '93, sheesh!) at Ohare was in cash, same scenario, sans the .45. Our salary was direct deposited anyway, but the extra money was always in cash.
 
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Old 07-24-11, 08:07 PM
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Heard some friends talking about trading labor the other day. (IE I do some electrical work for you if you pour some concrete for me) Another guy there who works for the IRS said that bartering is illegal because there is no tax revenue.

I would agree with Wayne. What he does with his money and taxes is up to him. How do you know for sure he will not claim that money at the end of the year? You paid him for his services fair and square.
 
  #12  
Old 07-25-11, 10:15 AM
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Originally Posted by chandler View Post
All I need is to have the IRS on my back checking into the improprieties of my business. While it may be nice to dodge the bullet on cash jobs, IMO it ain't worth the possible hassle down the line.
If I was in business I think that would be my thinking, too. When the IRS gets a hold of you they won't let go or so I've heard.


 
  #13  
Old 07-25-11, 11:26 AM
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The barter thing is an interesting point. I'm tiling a bathroom for an elderly friend of my wife. I told her I would do the tile if she paid for the materials. Yesterday she offered me a pick from her dead husband's gun collection as payment for my labor. I declined, but had I accepted one should I declare it on my taxes?
 
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Old 07-25-11, 11:50 AM
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That was always the issue with the barter groups. I really doubt the IRS considers it that big an issue. But yes, you probably would be required to either declare the value of the gun or the prevailing rate for a similar job.

But in your case I would think a good argument could be made for the fact that you did the work for free...and the gun was a thank you gift not negotiated in advance.
 
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