Should I report all of my taxes?

Question

I have a full time job as a waiter and have not invested in real estate yet. I will soon become a manager of a new restaurant owned by my boss. He gave me the option to say that I'm getting less money so at the end of the year we don't have to pay as much taxes.

Since I'm going to invest in real estate later on, is it better to show my full income so when I'm ready to finance, I could get a higher loan? Or is it not worth it?

Christopher Smith · Answer

Have you ever thought about how much sense it makes to publicly post that you are thinking about not declaring all of your taxable income?

Alexander Felice · Answer

First, you're helping your boss more than you're helping yourself.

Second, banks only lend on what you pay taxes on. So getting paid under the table isn't going to help you with lending at all whatsoever

Michael Plaks · Answer

@Xavier Garcia

May I share a life lesson from someone almost 3 times your age?

Your boss is planning to cheat on his taxes, making no secret about it, and he is trying to recruit you to help him do that. People like that will also screw you over - because this is how they are wired. Maybe not right away, but whenever they have an opportunity.

Be very careful associating with such people. Surround yourself with honest people.

Eamonn McElroy · Answer

@Xavier Garcia

As @Alexander Felice noted, the only one who "wins" in this situation, if we can call breaking the law for a net gain and gambling that one won't get caught "winning", is your employer.

You're going to have to explain to lenders how it is you happen to be working but have no taxable income and are not filing income tax returns.  They are all going to turn you down for a loan.  There's no good way to explain fraud.

Also, as you're not paying FICA you're not accruing Social Security benefits.  Another loss for you.

Anthony Wick · Answer

@Xavier Garcia

Dude, your post is exhibit 1 for the government on your tax evasion charges. Yes, follow all laws, for literally everything. All the time.

Theresa Harris · Answer

Report all of your income from your job on your taxes.

Xavier Garcia · Answer

That was very detailed and easy to comprehend. I am only 21 and new to all of this about taxes. I will get him change that for me asap.

Again, thanks for all that information. And no, I didn't ment to commit any frauds.

Xavier Garcia · Answer

Thank you for the response

Xavier Garcia · Answer

That's why I'm asking, because I want to do the right way. Now I know what needs to be done.

Lynnette E. · Answer

The amount of pay that is reported and taxed is what you use for your federal, and in many states, the state, tax forms that you filed each year.  If you do not report all of your income then you can be charged with tax evasion, mail fraud, a bunch of things.  In the end you can go to prison, plus owe back taxes and penalties.  So it is not a good idea to cheat on your taxes and not reporting all your income is cheating on your taxes.

Also, in case you do not know, your income, as reported to the government, through out your working career,  is used to determine your social security check when you retire.  It is used to determine the amount of your unemployment if the business that hired you fails and you are laid off.  It is used to determine your disability payment if you are injured at work and unable to continue to work.

It is also used to determine your income vs. debt ratio when you try to borrow money, and is used to determine how much you can afford to borrow.

It is used to determine how much you can put in some retirement accounts.

When you under report your income you hurt yourself.

When your employer under reports your income, he pays less in social security taxes, pays less for unemployment insurance, pays less for workman compensation insurance, and so on.  It benefits your employer to not report all of your income, but it hurts you greatly!

Also, as a food service employee, your income is likely at the very low level on tax tables, unless you are Gordan Ramsey!

Should I report all of my taxes?

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