Employer failure to withhold FICA

[born2run]

I know that legally an employer is not required to withhold state and federal taxes, but I am also aware that they are required to withhold SS and Medicare. My boss is doing neither, and pays in cash. When I asked him about it he laughed and said, "legally you don't work for me. Don't report my income." He runs a small 100 cow dairy, btw. So folks, what do I do? Need some advice here.

 

[kerley]

Some States have different rules for Farm (Day) labor. I guess it could be argued that your labor is private treaty. If your employer is not deducting payroll taxes he most likely is not paying Workmans comp. either. If you get kicked by a cow and break a leg who is going to take care of you ? When an employer can not comply with Labor Laws and has to cheat to stay out of the red it is time to quit. Check with the Dept. of Labor in your state. Good luck, Tom :cboy:

 

[Jogeephus]

If you are going to make a career out of this job, I would insist that he take it out cause your social security check will one day depend on what you pay in. This of course will cost him and you more and he will have to do all that paperwork to be in compliance. Its a total headache if you have never done it before.

You also need to be careful that he doesn't 1099 you as a contractor. Of course he needs cancelled checks to prove he paid you so really need to keep records or he could stiff and claim he paid you more than he actually did.

If this is not a career for you and you are just doing it for some extra money, I'd just take the money and not worry about it. Heck, when you get old enough to draw Social Security it probably won't be there anyhow. JMO

 

[dun]

Sounds to me like it's either not an actual job that he is paying wages (under the table)for or he is treating it as if you are a private contractor.

 

[born2run]

I'd assume he's paying me under the table. Thanks for your input everyone. Not sure how long this job will continue, if something else opens up I'd leave in a heartbeat. Weather I file as a independent contractor or not at all probably will depend on how long I work for him.

 

[hurleyjd]

Keep in mind that you need so many quarters for SS. The quicker you get them the better off you will be. You do not have to be old for SS benefits. You might become disabled and need it sooner than you think. He is breaking the law by not withholding the SS. There is a certian amount of hours you work and are paid for that qualifyes you to have the employer and the employee pay in to SS. I will try to find it and get back with it. Pretty big penelty on the employer it is the same as tax evasion. If you are contracting then you are required to pay your on taxes on your income.

 

[hurleyjd]

Farm workers are covered by Social Security if you pay them:

150 or more in cash wages during the calendar year for farm work; or
Less than $150 in cash wages, but your total expenses for agricultural labor are $2,500 or more in a year.
However, if you employ seasonal hand-harvest laborers who commute to work daily from their homes, who are paid on a piece-rate basis and who did less than 13 weeks of farm work the previous year, a different rule applies. Their work is covered under Social Security only if you pay the employee at least $150 in cash for the job.

 

[bigbull338]

hold it that person is contract labor.he does not have to pay in SS on them.its up to them to pay their own SS an taxes assoc with making a living.our fulltime milkhand always payed their own SS an taxes if there was any tobe paid.an they paid for the rest of their health ins.yall are forgetting 1 thing.if the dairymen pays all his bills in cash he doesnt have to turn it in.does the owner of the dairy give his employees a W2 form at the end of the year with their earnings on it.

 

[Jogeephus]

Here is some information pertaining to SS. Used to, you had to work at least 10 years to qualify. However, they changed the rules when they made farmers pay social security and the older farmers felt it unfair that they were going to have to pay social security and not be able to collect any benefits. So they compromised and this is how it now works. My understanding is that this compromise has caused a lot of problems and is one of the reasons social security is in the shape its in now.

http://www.danaise.com/do_i_qualify_for ... curity.htm

 

[hurleyjd]

hold it that person is contract labor.he does not have to pay in SS on them.its up to them to pay their own SS an taxes assoc with making a living.our fulltime milkhand always payed their own SS an taxes if there was any tobe paid.an they paid for the rest of their health ins.yall are forgetting 1 thing.if the dairymen pays all his bills in cash he doesnt have to turn it in.does the owner of the dairy give his employees a W2 form at the end of the year with their earnings on it.

Bigbull read this from the SS:

Reporting farm workers' income
Most farm workers are covered by Social Security. If you employ covered workers, you must keep records of their wages, withhold their Social Security and Medicare taxes, report their wages and pay all taxes due. If you do not, you may be subject to a penalty. If a farm worker complains to Social Security that wages were not reported, and if he or she has proof of those wages, the violation will be reported to the Internal Revenue Service (IRS).

Farm workers under your direction and control cannot be considered independent contractors. They are employees and their wages must be reported to Social Security.

 

[dun]

hold it that person is contract labor.he does not have to pay in SS on them.its up to them to pay their own SS an taxes assoc with making a living.our fulltime milkhand always payed their own SS an taxes if there was any tobe paid.an they paid for the rest of their health ins.yall are forgetting 1 thing.if the dairymen pays all his bills in cash he doesnt have to turn it in.does the owner of the dairy give his employees a W2 form at the end of the year with their earnings on it.

Bigbull read this from the SS:

Reporting farm workers' income
Most farm workers are covered by Social Security. If you employ covered workers, you must keep records of their wages, withhold their Social Security and Medicare taxes, report their wages and pay all taxes due. If you do not, you may be subject to a penalty. If a farm worker complains to Social Security that wages were not reported, and if he or she has proof of those wages, the violation will be reported to the Internal Revenue Service (IRS).

Farm workers under your direction and control cannot be considered independent contractors. They are employees and their wages must be reported to Social Security.

Does't really mean a thing what the law says should be done. The majority of the farmhands in this area are paid under the table with no records being kept. May not be leagal, but that's the way it is in the real world.

 

[novatech]

I know that legally an employer is not required to withhold state and federal taxes, but I am also aware that they are required to withhold SS and Medicare. My boss is doing neither, and pays in cash. When I asked him about it he laughed and said, "legally you don't work for me. Don't report my income." He runs a small 100 cow dairy, btw. So folks, what do I do? Need some advice here.

Go ahead and report him. That SS which you probably will never get because they will be broke by then is important. But also be prepared to give the IRS your share of what you owe, and your share of the SS, plus penalties and interest.
The IRS will aduit him, fine him, auction off everything he owns. This results in 100 dairy cows out of the system and a farmer looking for a job. The plus side of this is that some city farmer can pick up the farm cheap and raise miniature donkeys, thus putting the US economy back on track.
One more thing, as you will no longer have a job you can now go down to the welfare office and get free money from the government. You will probably be standing next to the guy that didn't withhold that $.25 from your check.

 

[Jogeephus]

I know that legally an employer is not required to withhold state and federal taxes, but I am also aware that they are required to withhold SS and Medicare. My boss is doing neither, and pays in cash. When I asked him about it he laughed and said, "legally you don't work for me. Don't report my income." He runs a small 100 cow dairy, btw. So folks, what do I do? Need some advice here.

Go ahead and report him. That SS which you probably will never get because they will be broke by then is important. But also be prepared to give the IRS your share of what you owe, and your share of the SS, plus penalties and interest.
The IRS will aduit him, fine him, auction off everything he owns. This results in 100 dairy cows out of the system and a farmer looking for a job. The plus side of this is that some city farmer can pick up the farm cheap and raise miniature donkeys, thus putting the US economy back on track.
One more thing, as you will no longer have a job you can now go down to the welfare office and get free money from the government. You will probably be standing next to the guy that didn't withhold that $.25 from your check.

:lol2: :lol2: Novatech, I'd say you have a pretty good understanding of the system. I think today's tax system is just way to complicated and I can understand why someone would not want to participate. Its probably not that they are trying to cheat the govt but they may not have the time or the knowledge to fill out all the stupid forms. Fill just one out wrong and you will play he77 for six months - speaking from personal experience here. This is why I think a flat consumption tax is the way to go.

On top of that, here we are fined/taxed for creating a job. I have to pay another local employers tax for each person I hire. On top of that, other agencies like workers comp will send you studies that they want you to fill out. I got one of these a few years ago and they wanted me fill out all these forms and things to show them all the training and such that we do to explain why we have never had a workers comp claim. This was to conducted and filled out each month for a few years. I tossed it in the trash. Figured that if I told them the truth about why we didn't have claims the ACLU might hit me with a lawsuit. :secret:

 

[Brute 23]

Is is really cash or checks with your name on them?

IF its really cash then don't worry about it. IF its checks with your name you might want to go ahead and claim it on your taxes to cover your own rear.

ALot depends on how much it is also, and just because you are not an employee doesn't mean you are not covered my workman's comp. Most policies cover contractors.

Keep up with all your hours and what you did and how much you got paid. IF he ever tries to screw you or fire you , especially if you get hurt, you can tell him you have all the paper work to turn him in. IF he tells you what time to come to work, what to do, and how to do it you are an employee and they will make him pay it back. That gives you a little leverage. :lol2:

 

[born2run]

He pays in cash, to the tune of around $1600/month. It's pathetic what someone in my tax bracket gets nailed with, I know that from past employers. Don't get me started on that.

 

[hurleyjd]

He pays in cash, to the tune of around $1600/month. It's pathetic what someone in my tax bracket gets nailed with, I know that from past employers. Don't get me started on that.

Your employer will have to furnish you a 1099 at the end of the year if he is going to take the wages as a business expense. He is crooked and is cheating you out of the taxes that he is due to pay into the SS system for your account. Your share will be $120 and his share for you would be $120. This may not seem fair but it is. If you have a family and you should get killed then your SS account would pay on each child until they are of legal age. SS is not only for old people but children and people that becomes disabled. I have a friend that worked all his life with the wages being paid in cash. They did pretty good when they were younger but now he cannot work and draws about $660 each month because he did not pay in. His wife is still working at Walmart. These folks are in their 70's and living in poverty.

 

[bigbull338]

heck you live in poverty even if you do get a good SS check.you really cant stop working till you die.

 

[dun]

If you take the money that would have been with held for taxes, SS, etc. and invested it in a mutual fund you would do better at retirement then what you would get from SS. Seems that people have lost the ability to save uless it's crammed down their throats by the government

 

[hurleyjd]

If you take the money that would have been with held for taxes, SS, etc. and invested it in a mutual fund you would do better at retirement then what you would get from SS. Seems that people have lost the ability to save uless it's crammed down their throats by the government

I doubt if you could get any one to invest on their own and keep after it. I know a lot of the coharts that worked with me would save for a while then borrow it. My wife and I funded the 401k to the max each year and are setting pretty well. And also we are pretty frugal. No I am not planning to work until I die the cows I have do not make me a living in fact if I did not have them i would be better off. Back to the mutual funds some will make you money and some will break you I have been there and done that. I do much better picking my own stocks. SS is a good program. All the government has to do to get through it is to sell some thirty year bonds as Ronald Reagan done. Fund the shortfall and pay it back after all of us old farts and baby boomers are gone on to the happy hunting ground. There is about one out of fifty people that has the displine to save. The only problem that my wife and I have is worrying that we will make a booboo and lose it all. Plus SS would be in good shape if everyone paid their taxes and did not try to find some way to get around them. Plus the USA does not have enough workers working in jobs that amount to anything. The federal government is the biggest employer in America 27% now add on the state governments and the county governments and the city governmets workers and you begin to see that the problem is people working in goverment and the rest of us trying to support them.

 

[Jogeephus]

If you take the money that would have been with held for taxes, SS, etc. and invested it in a mutual fund you would do better at retirement then what you would get from SS. Seems that people have lost the ability to save uless it's crammed down their throats by the government

I doubt if you could get any one to invest on their own and keep after it. I know a lot of the coharts that worked with me would save for a while then borrow it. My wife and I funded the 401k to the max each year and are setting pretty well. And also we are pretty frugal. No I am not planning to work until I die the cows I have do not make me a living in fact if I did not have them i would be better off. Back to the mutual funds some will make you money and some will break you I have been there and done that. I do much better picking my own stocks. SS is a good program. All the government has to do to get through it is to sell some thirty year bonds as Ronald Reagan done. Fund the shortfall and pay it back after all of us old farts and baby boomers are gone on to the happy hunting ground. There is about one out of fifty people that has the displine to save. The only problem that my wife and I have is worrying that we will make a booboo and lose it all. Plus SS would be in good shape if everyone paid their taxes and did not try to find some way to get around them. Plus the USA does not have enough workers working in jobs that amount to anything. The federal government is the biggest employer in America 27% now add on the state governments and the county governments and the city governmets workers and you begin to see that the problem is people working in goverment and the rest of us trying to support them.

I disagree with you about social security being in good shape if most people paid their taxes cause I think most people do. The problem is like you pointed out - the size of the government and the government's habit of putting social security deposits in the general fund and spending it to increase the size of government. There are also a lot of people drawing social security and other benefits that are fully capable of working and earning a living.