If I am paid in cash and required to fill out a W4(When you first get hired), info?
I am paid in cash, but when hired I was required to fill out a W4 (I think that is what they call it) claiming either a 0 or 1. Is this illegal? Are they using it for their own purposes if they get audited again? Would my employer get penalized for this? They tell me "I'm not on payroll, because being on payroll costs them money", however my employer says she still has to pay taxes for me working there. Keep in mind this place of employment has been audited TWICE. I need to know what I can do if I lose my job and need to expose this.
All other employees get paid by personal check and my boss uses an accountant to "have the employees paid".
However, the servers I work with all have to deposit the tips left on tables in a jar and get the tips the next day. I understand receiving tips DOES require you to pay taxes on it and it will end up receiving a substantially lower paycheck considering in my state $4.95(illinois) is minimum wage for them.. but, they receive no paycheck where I work as my employer claims "Your paycheck went to taxes".
Any advice on being paid in cash with a W4 and server tips would be much appreciated.
- MLv 66 years agoFavorite Answer
" I was required to fill out a W4" & probably an I-9 too. Where are your copies of these forms?
"I need to know what I can do if I lose my job and need to expose this."
I want to make sure I understood you correctly. Correct me if I'm in error. So as long as you are employed, you don't have an issue with this. "Expose this" - for what reason? Do you think you earned enough to apply for unemployment or you automatically qualify because you lose your job? You need to read up on unemployment rules in your state.
You know as well as I do, what your employer is doing is NOT legal.
It does NOT matter if you are paid by cash or check. You need to keep accurate records of every dime you are paid, including tips. You are required to file a tax return if your earnings are over 6,200 or 10,150 for fed & if you are a dependent in IL, you have to file if over 2,100. Have you made this much? Whether you did or not, you still have to file a fed tax return to report any tip income you didn't pay social security & medicare tax on & you'll have to pay the amount due.
Here's the form you'll use to report any uncollected FICA.
I'm confused, you say "All other employees get paid by personal check and my boss uses an accountant to "have the employees paid". Then you say "but, they receive no paycheck where I work as my employer claims "Your paycheck went to taxes". You are contradicting yourself. Do they or don't they get a paycheck? Have you seen their actual checks?
"the servers I work with all have to deposit the tips left on tables in a jar and get the tips the next day" That's common practice when you are a tipped employee. In IL, minimum wage is $8.25 if 18 or over & yes, you are correct $4.95 if you are a tipped employee due to a 40% wage credit. The tips are counted towards IL minimum wage. The waitstaff has to be paid 4.95 for every hour. If the waitstaff is getting zip in their paycheck after being paid 4.95 for every hour they work it's due to w/h for fed, state, FICA & any other deductions taken. The waitstaff must be making a lot of tips for this to happen.
Yes, what your employer is doing is illegal. You've known this for a long time. I would think twice before turning her in due to spite if you get fired or lose your job. I've seen this happen, not only is the business audited, the employees can be too if the state revenue officers suspect unreported tip income which the employees did not report on their tax returns. I've also seen small businesses fail in this poor economy. Minimum wage goes up & due to the economy business falls off & when something like this happens, the business closes. All the employees who worked there lost their jobs.
You are not responsible for your employers illegal activities; but if you don't claim this income on your taxes, you aren't any better pot/kettle/black.
You should talk to your employer & tell her you are NOT comfortable being paid under the table & you want to receive a regular paycheck with taxes w/h . Start looking for another job. You don't want to work for this person & if she has been audited several times, it's only a matter of time before they find out about you.
Do what you think is right. You can turn her into the state dept of labor or revenue and or both. They will both send agents to investigate.
- BobbieLv 76 years ago
W-4 Employee Withholding Allowance Certificate ONLY for the FIT withholding amounts out of your Gross wages for each pay period during the 2014 tax year.
And after the end of the 2014 tax year by the end of January 2015 you receive a W-2 form from this employer and the Box 1 $$$$ Gross wages for the 2013 tax year and the Box 2 $$$ FIT amount withheld during the 2014 tax year.
And they should have some information shown about your TIP income also on your W-2 form could be ALLOCATED TIP amount for that purpose.
How to report allocated tips. Report the amount in box 1 and the allocated tips in box 8 of your Form(s) W-2 as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. (You cannot file Form 1040A or Form 1040EZ when you have allocated tips.)
Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Complete Form 4137, and include the allocated tips on line 1 of the form. See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier.
Hope that you find the above enclosed information useful. 07/12/2014
- Max HooplaLv 76 years ago
As long as you get a pay statement showing everything it doesn't matter if you get cash or check. Not being on payroll but filling out a W-4 doesn't make sense. Of course being on payroll cost the employer because he has to pay employment taxes and workers compensation insurance. If Social Security and Medicare taxes are not withheld from your wages and reported tips make a discrete call to your state's unemployment tax department.
- AmberLv 45 years ago
Paying in cash is legal a long as the proper taxes are withheld and ae paid. It's very possible for a server's entire paycheck to go to taxes, but you should all be getting a paystub showing hourly earnings, tip amounts, and taxes withheld each pay. If you aren't getting paystubs, ask for them - if you still don't get them, it's pretty sure your boss is doing illegal things. If any of the other servers have been here since last year, did they get a W-2 at the beginning of this year?