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Is it illegal to NOT pay income tax if you're self employed?
and you're paid only in cash?
13 Answers
- East of EdenLv 41 decade agoFavorite Answer
Yes, not paying an income tax is illegal for any case. If you are self-empolyed and also set up as a sole proprietorship you might also have your personal assest seized when the IRS comes for you. If you've paid in cash get a notarized recipt to prove you've paid as well.
- Anonymous1 decade ago
Not only are you required to pay taxes if you are self employed, but you are also required to file quarterly estimates.
However, the tax man will have some difficulty determining your tax liability if you are paid in cash. They have had that problem for many years with waiters and waitresses. They finally decided to impute an income for these people based on the sales of the restaurant where they work.
- littlemommaLv 41 decade ago
Absolutely!!! You still must pay your State and Federal Taxes for whatever income you make. Unless of course you only make like $500 the whole year. Depending on "what" you are doing (daycare, cleaning, ect...) your clients may be reporting that they paid you a certain amount that year and you will be responsible for the income taxes on that money.
- curious georgeLv 51 decade ago
Paying income tax is only part of what is required by law. If you make over $400 (self employed), you will also have to pay self employment taxes, which cover social security taxes, medicare, etc. Go here for lots of info http://search.irs.gov/web/query.html?col=allirs&ch...
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- 1 decade ago
yes...even thought you are self employed you must pay taxes! But, since you are self employed, if you keep really detailed records, you might not have to pay as much!
- TiberiusLv 41 decade ago
NO it is not illegal. It is possible to have NO income tax to pay, so the answer to the question you asked is NO.
Now, if you understate your income/income taxes or claim something illegal, then the answer would be YES.
- KrautRocketLv 41 decade ago
yes, although it is harder to track with cash-only transactions.
At some point however you pay bills and it can be proven that you make a certain amount by tracking your bills.
Do what you think is prudent.
- Anonymous1 decade ago
yes