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Playful Jade · 02-26-2010, 07:18 AM

In the "business" that we are, its not a easy to obtain the desireable materials we want.. I am ready to but me a new car but am afraid of getting trouble with the IRS.. I have a car now that Im willing to trade in for the car that I want but still am unsure on how I should go out doing this. Trade my car in and use what they give me plus what I bring to get the car I want.. I Dont Know..

I could use the help of my fellow peers and friends from the board for some help on this issue. How is a provider supposed to even get the essentials.. Car, Home and etc with no "real job". And also without creating attention that will attract attention you dont want or need.

Thanks for the help in advance

steviewinwood · 02-26-2010, 07:22 AM

I have an idea...Stop breaking the law and pay your taxes.

Playful Jade · 02-26-2010, 07:26 AM

Stevie.. I have filed my taxes this year already.. My first time doing so. I was thinking tax season might be the best time to do so.

fortwortholdguy · 02-26-2010, 07:44 AM

You should file your taxes as a self-employed entertainer but you won't have any W-2's or 1099's...it's easy to do with Turbotax or Taxact.

rex4998 · 02-26-2010, 07:54 AM

the IRS will NOT come after you for paying cash for a car

tsrv4me · 02-26-2010, 09:03 AM

Please dont pay with over $10,000.00 in cash ......the law used to be ,and I'm sure it still is ,ANYTHING over $10,000.00 in cash had to be reported to the Government ...I am sure it is still the law ...When do you remember ANY LAW being repealed? Especially when your money was involved ...and they thought they could get you for more ... it was set up expressly for them to keep an eye on money laundering and drug dealers .....so be careful on How much cash you use for purchase .....T

HoneyRose · 02-26-2010, 09:20 AM

Jade, if you filed a tax return and paid taxes, then there isn't any reason to use cash. You earned income, reported it (by filing a return), and paid taxes. So you can certainly spend it without any problem.

You should have money in the bank just like anyone else and pay for the car with a check, not cash, just like anyone else.

They may want a cashier's check or a wire transfer but neither you nor they would handle any cash.

Paying in cash is a huge red flag. While the law states that any cash transaction over $10,000 must be reported, a cash transaction for less may be reported.

I don't know if a car dealership would do that, but banks will report large cash deposits if they seem suspicious (usually because they are frequent as though someone is trying to avoid the 10k rule; or because they aren't consistent with the business the customer claims to be in).

I know this from the other side of the counter~ I used to work in a bank

Truckertom · 02-26-2010, 09:23 AM

You can pay with cash, just have to fill out a form that sages it's not drug money. The IRAss don't care how you made it as long as you pay the tax on it. Even bank robbers are have to fill a tax form.

Playful Jade · 02-26-2010, 09:38 AM

HoneyRose, heard you were the person to go to about this concern,I was just contacting you..

Everyone.. Thanks so much for the help. This isnt my area of expertise which is why I asked the board. I had been thinking about thsi for a while so I wanted to make sure I was going about the right way to do,without getting in any trouble. Glad to know as long as I filed,Ill be okay..

Thanks again...

Playful Jade · 02-26-2010, 09:39 AM

I didnt know I could file taxes as an self-employed entertainer... Hows that work??

guest042312 · 02-26-2010, 09:52 AM

When it comes to taxes take a couple hundred of it and go see someone to do your taxes. I am not talking H&R Block here... Tell them what you do and that you want to do the right thing when it comes to taxes. They will guide you... You trying to do it on your own the first time is a bad thing

greygoose · 02-26-2010, 11:37 AM

I agree with Steve. Since you are self employed, you have to pay both sides of Social Security taxes (although you can deduct the "employer's portion). Find a good accountant and invest $200-$300 to have your taxes done right. Also, you mentioned you filed for this year already. I'd still have an accountant look at it and see if you paid everything you owe, or maybe you paid too much. If that is the case, you can file an amended return and get a refund.

Finally, make sure you have filed for all past years that you had income. The IRS takes a very dim view of those who don't file when they owe money, and they will find you eventually.

The IRS doesn't care how you make money. You can say you are a bookie, a dancer, whatever. They just want their money.

HoneyRose · 02-26-2010, 11:55 AM

Jade~ I sent you a PM.

Here's an interesting example from “Online Banker” of a bank looking at multiple deposits under $10,000 as a possible example of "structuring" (the term used for depositing amounts under the trip point.)

”We are so tuned and trained to watch for money laundering and structuring, that sometimes we even see it where it is not.

Consider the story related by one enlightened banker.

She works in a small financial institution. They have chosen not to exempt any customers. They only fill out some three to five CTRs a month when they have the unusual "over-$10,000" transaction.

One day a teller reported that she suspected her customer was structuring his transactions. This customer would come in on Monday, Wednesday and Friday and make cash deposits, always under $10,000. Some of the deposits, especially on Monday, would be between $6,000 to $8,000. Others, during the week, might run from $1,500 to $4,000.

The teller noticed this because he always had mostly cash deposits, with very few checks.

Was he structuring? Trying to avoid CTR filing?

The bank officer decided to look further, and so did her own investigation.

She first took into consideration the business of the customer. The account was that of a local beer and soft drink distributor. It was a natural occurrence for business to pick up on the weekend, especially in the summer, and for the deposits on Monday, therefore, to be larger than those during the week. By watching the withdrawals and checks paid against the account for a while, she found that all of the payments out during the month were to suppliers, payroll and utilities.

In her opinion, there was no money laundering going on, but rather just the normal run of business. The tellers had been cautioned to watch for suspicious activity, but this banker really didn't want to file a Criminal Referral Form if the activity really was not suspicious, or if it was not structuring. Her investigation, (which, by the way, she documented and put into file in case the examiners wanted to see it) indicated that there was no need to report this activity.

She said if large sums had been wired out, large checks paid to out-of-town institutions, or other unusual activity, she would have probably filed the Criminal Referral Form.

As it was, she congratulated the teller for noticing and reporting the deposits, and also related to the teller the reasons for her decision not to file the Criminal Referral Form in this case.”

Precision45 · 02-26-2010, 03:28 PM

You could always form an LLC (Limited Liability Company) and pay taxes that way. Form an entertainment company in your name, report and pay on your earnings. Hell it's legit, costs only a couple hundred buck to form and is SIMPLE to do.

Even if you are a cash-only business it will work.

notdeadyet · 02-26-2010, 04:25 PM

The easiest route is to be self-employed, and file a Schedule C as a part of your annual Form 1040. As Greygoose said, you'll pay the self-employment tax as well as income tax, but 1/2 of the SE tax is deductible. All of your "entertainer-related expenses" should be income-tax-deductible.

There's little point in creating an LLC (limited liability company). These entites require paperwork to establish, filing fees ($750, I think, but am not sure) with the Texas Sec. of State (and all filings are a matter of public record), AND an annual partnership return to IRS (Form 1065?). AND, you'll still need to file a personal IRS Form 1040.

If you're computer-comfortable and don't want to go to an accountant, you probably can use TurboTax or the H&R Block (or other) income tax software to prepare a return. If you do this, just remember to go thru the program step-by-step, since a lot of it is question-and-answer format, and very helpful.