<p>I really think that you should have your D talk to the owner. Yes, it is important, and at the same time, she needs to learn how to handle these kind of challenging situations. The best way for her to learn would be for you to guide her through the process by helping her figure out what to ask, and telling her to take notes on what he says. If you have more questions after she talks to him, you could help her check about any legal implications, and also could help her talk to the owner again.</p>
<p>We aren’t doing our offspring any favors when we handle for them things that really are their concern and that they need to handle. It’s great to guide them, but not to take over the process for them. After all, they won’t have us to handle their problems forever.</p>
<p>Not to be grim, but I know a college soph whose 54-year-old mom died unexpectedly of a stroke last fall. Five months later, her 54-year-old dad died in his sleep of a heart attack. We never know how soon our kids will have to be responsible for themselves, so the more we help them acquire those skills, the better off they’ll be.</p>
<p>honestly getting paid of the books as a 17 yr old or w/e during the summer is no big deal. It may be illegal, but its def. not unethical. Its the buisness owners money and he can do waht he wants with. Also, enything someone gets paid for should be taxed then correct? You should let ur daughter keep the money if it off the books it should be cash, which is great. I got my first paycheck yesterday. It was for 832 dollars. Then i look at the rest of the stub and i lost 250.02 to taxes. Thats 30% of what some teenage earned in 2 weeks went to the government. So for every dollar i earn, i basically throw away 30 cents of it. Its better to just take the money off the books. I do not want to question what u are doing with ur daughter but i dont think its a good idea to have the parents talk to the boss for the worker. It doesnt reflect good on the worker. I work for a family aquaintance too and i feel it would look really bad if my mom went in to talk to him about matter pertaining to me.</p>
<p>Welcome to the real world. Ever hear about the only two things certain are death and taxes? And … don’t forget to file your 1040 in January. Bet you have a big refund coming.</p>
<p>I got my first paycheck yesterday. It was for 832 dollars. Then i look at the rest of the stub and i lost 250.02 to taxes. Thats 30% of what some teenage earned in 2 weeks went to the government. So for every dollar i earn, i basically throw away 30 cents of it.</p>
<p>That 30 cents is not thrown away, it is your contribution to the upkeep of the schools you attended, the roads you drive on, the police and firefighters who protect you, the military who defend your rights…</p>
<p>Then I suggest you rite (um, better if you * write*) your elected officials and discuss this issue. Last time I checked however, our income tax system taxed lower income taxpayers at a lower rate than higher income taxpayers. It’s the rite (oops – right) thing to do.</p>
<p>Sorry if I missed this piece, but is she receiving her full wage (no taxes being withheld)? If so, and she’s not making a bunch of money, it really isn’t much different than any teenager who babysits, mows lawns, etc… I wouldn’t worry about it too much. The comment about on the job injury is a valid one, though, but I’m guessing this is not a position that puts her in harms way. Do the right thing, list her income for financial aid purposed, but wait and see how much she makes before you get concerned about federal tax requirements.</p>
<p>(If ANYTHING is being withheld, that’s a whole different issue and something needs to be reported.)</p>
<p>To the poster who was irritated about paying taxes…get over it. If you are a student and only working for the summer, chances are you will be refunded most (or even all) of the federal withholding (but not the FICA) if you file a tax return, which you should do if you receive a W-2. It’s very simple to do, but depending on your age and situation, you should definitely cross reference with your parents regarding exemptions.</p>
<p>Zoosermom, I cannot contribute anything further to the excellent responses already here, except to really emphasize that operating outside of the law is a very, very bad idea, especially in today’s regulatory climate. Post 9/11, in an effort to track terrorist financing, all sorts of technology tools and information resources are in place at the IRS and other federal government agencies that are put into place specifically to alert law enforcement interests to anomolies and petty crime which could be linked in some way to terrorism and collateral crimes. The investigatory tools in place in federal government and in the legitimate financial market space today are extraordinary, and the smaller sums of money are of intense interest to those who actively search for indications of crime. </p>
<p>I’m sure this post reads unnecessarily alarmist, but, I cannot emphasize enough the critical importance of distancing oneself quickly from ANY financial arrangement that is anything less than 100% legal. I am also sure this business owner is a very nice, kind man - lots of nice, ethical, honest good people do things that they do not realize can be very detrimental - and sometimes they even do so on the advice of their CPAs or other financial counsel, these advisors being ethical and well meaning but uninformed. In this man’s case, he’s probably too busy keeping his customers happy and keeping the ice cream cold and doesn’t have time to worry about who is studying his financial activities. If it were my daughter? I’d advise ending the relationship immediately, and, I would pay the taxes owed NOW to the extent you can estimate them - I wouldn’t wait until the end of the year.</p>
<p>I’ll give you the same advice I’d give a paying client (including the employer in this case) - do it by the book. If the other guy isn’t doing it by the book, do your part by the book. That means, in your case, filing a tax return next April declaring the income and paying the self-employment tax yourself. (There probably won’t be a regular income tax liability.) </p>
<p>There are a lot of good reasons for doing so. What many people don’t realize is that the employer is actually taking on a huge risk by hiring people “under the table.” If they are injured on the job, he is responsible, just as if he had worker’s comp. But since they.re not on the policy, he’s personally liable. And he doesn’t get the advantage of worker’s comp liability limits. Ouch. (Just in case any of you are thinking about hiring people “off the books” Don’t do it!)</p>
<p>But Zoos - your daughter should be OK treating this like an independent contractor gig (which it isn’t) for tax purposes, and listing it as a job on all of her college documentation. The key is - you guys do what you’re supposed to do. Tends to be pretty good advice in most situations. I don’t think anything more drastic than that is necessary. But I’d advise getting a different job next year.</p>
<p>Why? This is so much trouble for nothing. The IRS has bigger fish to fry than a teenager trying to make some extra bucks , trust me. Also wouldnt it help you for financial aid if you didnt declare the money she made. BC that would be an extra grand-2 grand that would go to her education (i assume thats what its for, but i could be wrong) that the college will not know about.</p>
<p>ski - I’m an old man who has practiced law for over thirty years. If you think you know all the different bad things that can happen to you if you cut corners you’re wrong. I’ve seen more people crash and burn over things they never dreamed would be a problem than you can imagine. Early in my career I tried to figure out just how close to the edge my clients could skate - you know what? It didn’t make any difference. The pennies they saved by cutting corners never made a difference in the long run. If you’re honest and don’t try to cheat you will come out fine in the long run. (I know “the long run” isn’t a high priority for many young people, but I’m talking to the mom here.) You think that it’ll be OK to cheat “just a little”, “just this time” and sooner or later it will come around to bite you in the butt. And for what? the self employment tax on an ice cream scooper’s wages? The small cost of doing the right thing is worth it, on more than one level.</p>
<p>Small cost!! I just paid 250 dollars in taxes on my first paycheck which was 831. That is 30% I am only 17 yrs old trying to make some money. Look you are right about what you say in general. But yrs ago this would never have been an issue</p>
<p>I definitely agree that the right way to handle this is for your family to approach the employer in a positive, constructive spirit of “Of course, we understand that you’ve been very busy but we REALLY need to get this straightened out properly because it’s in everyone’s best interest to do the right thing.”</p>
<p>From the facts stated, it looks pretty clear that your daughter’s only obligation is HER SHARE of the FICA tax, 7.65%, which should have been withheld by the employer. (She is NOT self-employed, so she does not owe the entire 15.3% that some posters above have been mentioning.)</p>
<p>She should say that she want to refund to him the money which should have been withheld back to the employer, so that he can remit the correct amount to the IRS. </p>
<p>If your husband and daughter approach him in a diplomatic and non-accusatory way, with the clear, implicit but firm, assumption that of course he will remit the money to the IRS, it will be easier all around. </p>
<p>Your daughter should certainly prepare an itemized receipt for him to sign when she refunds the money that should have been withheld. It may be face-saving to explain that she needs that documentation for financial aid records, and you should also make clear that she will need a W-2 next January, in part because the college financial aid office require it.</p>
<p>It would be best for your daughter to repay the money that should have been withheld by writing a check to her employer, because then she has yet another record of it.</p>
<p>Once he has the money that should have been withheld for her share of the FICA (and possibly any state taxes involved–I don’t know your state tax situation), she is entirely in the clear. </p>
<p>If he doesn’t remit to the government, there is absolutely no violation on her part. (Consider the parallel situation of someone who purchases an item and pays sales tax, but the merchant doesn’t remit it. She is guilty of nothing.)</p>
<p>As another poster pointed out, there are, unfortunately, many unscrupulous employers who DO withhold, but don’t send the money to the IRS, and their unwitting employees don’t know what’s going on until they want to file their taxes the following year and don’t get a W-2. Basically, they wind up filing without a W-2, based on income reconstructed from pay records, and then the IRS goes after the employer, NOT the employee.</p>
<p>So really, straightening things out from your daughter’s end is very simple–just figure out what the withholding should have been, refund it to the employer, and have him straighten things out with the IRS.</p>
<p>ski - you don’t understand the system, and you’re forming opinions based on an incomplete and fundamentally inaccurate perception. If all that’s being taken out of your paycheck is taxes everything above about 8% is income tax withholding which you will get back when you file your tax return, assuming you don’t make much money this year. (If your first paycheck was recent and $800 you shouldn’t have anything to worry about.) You can reduce the amount withheld by talking to your employer (whoever does the books) and increasing your exemptions to reduce the withholding. Unless you earn a fair amount of money you won’t owe any taxes above the 8% FICA tax.</p>
<p>Ski - educate yourself about taxes. Not just ranting blogs, but real information about how employment taxes actually work. It’s information that will be useful to you.</p>
<p>sure if you can send me a link that would be nice. I will not make more than 2 grand this summer and then im done working at that place. I live in PA so i would love to know how to get my money back</p>
<p>I know it is generally frowned upon to look up others posts on other threads
BUt…
skisalom, you just argued on the very next thread AGAINST raising min wage.
Now you complain you aren’t making enough?
You aren’t even having to support a family.
If you , a student, don’t think your wage is liveable, why argue against raising it for adults, who need it to live on?</p>
<p>I went to a private school! I should pay less taxes!</p>
<p>Actually my only paid job was an internship at a Law Firm last summer, and at the end of the summer they paid me ‘on the books.’ (I think at least :P)</p>
<p>Every kid who babysat should report that income and pay taxes on it. And every parent did so when they were younger, right?</p>
<p>All you folks who waitstaff, remember that tips are taxable. And every parent did so when they were younger, right?</p>
<p>All you selfrighteous folks who hire a local person to mow, clean, babysit etc. are tracking payments to see if you need to withhold income tax, pay employment tax and so forth, right? You’ve hired a household accountant to keep track, right?</p>
<p>To stretch a bit further, I ask those posters who say to always stay within the law:</p>
<ul>
<li><p>do you pay use tax to your home state whenever you buy over the internet or in another state? (that’s the sales tax that’s due?)</p></li>
<li><p>do you always stay within the speed limit when driving? Never park illegally or overtime?</p></li>
</ul>
<p>Yea, it is sooo easy to tell someone else to be honest. </p>
<p>Just remember, this is a friend the OP is dealing with. What is the price of that friendship? Does the OP really want to risk bringing heat on someone who no doubt was well intentioned?</p>