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Author: 5000fingers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: cash income Date: 6/13/2003 7:19 PM
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If I regularly receive cash income for work that I do (in my case it is for private musical instruction), am I on the honor system for reporting this on my schedule C form?

How would the government know about this, even in an audit, unless I deposited checks into my checking account?

What about if I receive a check for services, and instead of depositing the check into my account, I simply cashed the check at my bank?
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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65843 of 121144
Subject: Re: cash income Date: 6/13/2003 8:26 PM
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If I regularly receive cash income for work that I do (in my case it is for private musical instruction), am I on the honor system for reporting this on my schedule C form?

Yes.

How would the government know about this, even in an audit, unless I deposited checks into my checking account?

Because you're an honorable person who keeps records, which they would ask to see. A crook wouldn't keep the records, but we know that's not you. What kind of idiot would broadcast to the world that he's a thief?

What about if I receive a check for services, and instead of depositing the check into my account, I simply cashed the check at my bank?

No difference. It's still business receipts.

Phil Marti
VITA Volunteer


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Author: cgrinder Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65847 of 121144
Subject: Re: cash income Date: 6/14/2003 4:46 AM
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now if by chance you would develope temporary brain freeze and forget to record an occasional receipt! :-D

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Author: geocarw Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65848 of 121144
Subject: Re: cash income Date: 6/14/2003 11:59 AM
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cgrinder

now if by chance you would develope temporary brain freeze and forget to record an occasional receipt! :-D

I certainly hope you aren't encouraging folks to underreport their income to pay less tax. This results in an unethical, immoral and an illegal act. Worse yet, guess who has to pay for the shortfall. I wonder what tax rates would be if everyone was honest.

George

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Author: CABob Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65854 of 121144
Subject: Re: cash income Date: 6/14/2003 3:58 PM
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The positive side of being honest is that you may be able to deduct business expenses on Schedule C that you might not be able to deduct otherwise which would essentially reduce the impact of the reported income.

Bob

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Author: cgrinder Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65872 of 121144
Subject: Re: cash income Date: 6/15/2003 3:35 PM
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now if by chance you would develope temporary brain freeze and forget to record an occasional receipt! :-D

I certainly hope you aren't encouraging folks to underreport their income to pay less tax. This results in an unethical, immoral and an illegal act. Worse yet, guess who has to pay for the shortfall. I wonder what tax rates would be if everyone was honest.

George

far be it from me to encourage americans to lie to our government and under report their income!

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Author: 5000fingers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65875 of 121144
Subject: Re: cash income Date: 6/15/2003 9:32 PM
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Because you're an honorable person who keeps records, which they would ask to see.

This is true.

A crook wouldn't keep the records, but we know that's not you. What kind of idiot would broadcast to the world that he's a thief?

Not me! I'm a different kind of an idiot. Actually, I used to not worry about reporting cash income when it was pretty sporadic, but now that I'm making a lot more money on music I feel that I need to be on the up-and-up. In fact, I think there is a negative psychological effect to always try to sneak around your tax liability. You put a pressure on yourself to NOT make money, in order to avoid paying taxes. That's totally psychological and not logical, but I believe it's true for a lot of people, and this is part of the "starving artist" mentality. I find that it's a lot better to report everything honestly, because I want to make MORE money, not less. There are already so many good and legal ways of avoiding taxes, so I figure why not take advantage of those? And besides, Quicken works a lot better if the books aren't cooked....

Phil Marti
VITA Volunteer


What's a VITA Volunteer?




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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65876 of 121144
Subject: Re: cash income Date: 6/15/2003 9:57 PM
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What's a VITA Volunteer

See post 65657 on this board: http://boards.fool.com/Message.asp?mid=19134136

Lorenzo

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65877 of 121144
Subject: Re: cash income Date: 6/15/2003 11:27 PM
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What's a VITA Volunteer?

Thanks for asking. I'm always trolling for new V's.

VITA is the Volunteer Income Tax Assistance program, an IRS-sponsored program in which you get free basic tax law training in exchange for a promise to spend about 4 hours a week during filing season preparing returns for the poor/elderly and befuddled. It's a terrific way to learn tax law and contribute to the community. There are several of us here who do it, and to the person we really find it rewarding.

Anyone who's interested can get more information by calling 1-800-829-1040 and asking for the VITA/TCE coordinator.

Phil

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