Getting Paid Cash - How To Do This Legally?

The unemployment rate around here is bad. I feel lucky to have got a job, but it pays in cash. What steps should I take to turn this in to the State / Medicare / IRS? I know i would be considered self-employeed, but I want to be turning something in, so I don%26#039;t regret it when i%26#039;m older or get caught for tax invasion. Do I need a business license? Is there a certain % each one takes out or does it vary from state to state? I live in Tennessee. I hope this job will get me on my feet, until I can find something better.

Thanks for your help.

Getting Paid Cash - How To Do This Legally?care credit

You pay your medicare and social security tax through your 1040 as self-employment tax.

You will file a Schedule C and a Schedule SE with your 1040.

The minimum filing requirement is only $400 per year.

You should probably look it to making quarterly estimates.

Getting Paid Cash - How To Do This Legally?

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Well, most town halls can help you with figuring that out and are more than happy to help. If not try a tax office or CPA, they will help you figure out what percentages you need to save for taxes and they usually have you pay them quarterly|||This is making a few assumptions which may or may not be valid, but you should start out by withholding 29% of your income for federal taxes.

Most families are in the 15% tax bracket, and your self-employment tax (to pay into the social security system for you) will net to another 14.2%. That is where the 29% amount comes from, and TN does not have a state income tax.

You would make quarterly payments using Form 1040-ES on 4-15, 6-15, 9-15, and 1-15 of the following year.

Note that is just fast math, and the amount could either be higher or lower depending on your full circumstances. As others have mentioned, a full tax projection should be done in order to make sure you are on target.