If you were being paid in cash, how would withholding be taken from your checks (if the checks don't exist)? The fact that you get paid in cash is not in and of itself a problem although it is pretty unusual. The issue is if you are an employee or an independent contractor and whether you should be a W2 (employee) or 1099 (independent contractor) worker. If you are an independent contractor and receive a 1099 and are paid in cash and the amount of cash received is equal to the 1099 amount reported you probably should have been making estimated tax payments during the year. If you are supposed to be classified as an employee and are not a W2 employee and the employer is not withholding taxes they are in the wrong and you need to correct the situation.
This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/
First, you said you were paid in cash, not a check. It sounds like you were an independent contractor, not an employee. Frankly, being an independent contractor gives you the opportunity for many tax deductions and I would certainly prefer this to being an employee. Talk to your tax adviser about this.
If, you believe you were an employee, you should talk to the company paying you. I am sure they can adjust your pay to include the necessary state and federal withholdings. Of course, the company may disagree and terminate you.
There's no problem getting paid in cash, then receiving a 1099 at the end of the year if you're an independent contractor or other non-employee service provider. However, if there are employment taxes that should be withheld in your case, your employer may need to do some adjusting to the arrangement. Check with your employer and if that doesn't satisfy the issue then consult local legal counsel.
Evan A. Nielsen
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Evan A. Nielsen is licensed to practice law in California. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.
That is exactly what they should do if they have paid you more than $600 during the year. I am not sure if you thought it was supposed to be "under the table," but if that is the case, nobody is supposed to pay you for work performed without reporting it.
But this assumes that you are not actually an employee, and they are trying to pay you as an independent contractor.
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