Is there a legal way

[street]

I was wondering if there is a legal way to get paid or compensated for work but not get a pay check?

I'm looking down the road and enjoy a summer job that is very flexible but the income I make doesn't do me any favors.

Is there a legal way a company can do to compensate for pay? Like a food voucher etc. that I wouldn't have to claim as income?

Thanks

 

[Ready]

Non cash compensation is still taxable. It may be more difficult for the government to track but it's still income. I remember when we used to give out Target gift cards for the holidays and employees would ask me if it was considered taxable income. Of course we never reported it, but it is considered income by the government.

If you are being fed meals while working that would not be income. But if they paid you in restaurant gift cards to be used later, that's income.

 

[street]

Gotcha and I thought that was the case but needed to ask. Thank you and I'm not looking at cheating at anything. I might have to just volunteer if they even let me do that with the laws in place.

 

[jazz4cash]

I think some employee benefits are not taxable. A colleague went to work for a local golf course as a club pro and gets some compensation but mostly just free/discounted golfing. The easiest way to do this of course is deferred comp e.g. 401k or IRA

 

[Jerry1]

You could ask them to pay you by contributing to your favorite charity(ies).

 

[MRG]

Is health insurance taxable?

 

[Jerry1]

Is health insurance taxable?

No. I think that's about the only non-taxable benefit left. Things like life insurance, they impute income on. The other is deferred comp, but that just defers the tax. May be others, but that's all I can recall.

 

[WestUniversity]

I was wondering if there is a legal way to get paid or compensated for work but not get a pay check?

I'm looking down the road and enjoy a summer job that is very flexible but the income I make doesn't do me any favors.

Is there a legal way a company can do to compensate for pay? Like a food voucher etc. that I wouldn't have to claim as income?

Thanks

There are 2 basic rules with the IRS...

1) all income is taxable
2) all deductions are negotiable

 

[SecondCor521]

I was wondering if there is a legal way to get paid or compensated for work but not get a pay check?

I'm looking down the road and enjoy a summer job that is very flexible but the income I make doesn't do me any favors.

There are only a few situations where additional income does not result in additional money in your pocket.

One well known one is if you are middle-aged or older and the additional income from your summer job pushes you over the 400% FPL level for your filing status and location.

Another situation possibly is the summer income pushing you over the automatic zero EFC for FAFSA.

There could be other reasons for refusing a salary - if you're a billionaire and don't need it, or the organization is very poor and you want to help them survive.

There is, of course, the misconception that higher brackets in our progressive tax system apply to all income and not just the amount over the bracket limit.

If you don't mind saying, what situation are you in that leads you to think that refusing the salary is a better choice?

 

[Sunset]

OP - you could be self-employed and contract to do the work, then simply have lots of expenses & deductions that would equal the income, resulting in zero taxes.

But even if you are in the new 24% tax bracket, which is pretty darn high, you still get to keep 76%, and it adds to SS earning (don't know your age).

 

[meierlde]

You could offer to take minimum wage and health insurance. Minimum wage should reduce the amount you are getting and the taxes accordingly.

 

[youbet]

I was wondering if there is a legal way to get paid or compensated for work but not get a pay check?

I'm looking down the road and enjoy a summer job that is very flexible but the income I make doesn't do me any favors.

Is there a legal way a company can do to compensate for pay? Like a food voucher etc. that I wouldn't have to claim as income?

Thanks

No

 

[Bamaman]

After taxes and 401k, I only used to draw just about half my gross income. And my wife worked.

But tnere is a vast sub-economy out there paying little to no taxes. I'm talking self employed people and entrepreneurs in a cash economy.

The difference is when they get to retirement time, they will see little Social Security. The fraudulent income can never be invested in the stock market and cash cannot be put in the bank. It is difficult to invest in the economy.

The sub-economy people just have to keep on working and ER is seldom an option. There's just so much cash you can risk burying in paint cans in the backyard.

 

[youbet]

OP - you could be self-employed and contract to do the work, then simply have lots of expenses & deductions that would equal the income, resulting in zero taxes.

He specified "legal." If his honestly stated expenses = his pay, he truly is working for nuttin' . From the tone of his post, he expects to benefit from his efforts but doesn't want to pay his share of taxes on the income. So earning $100 but also incurring $100 of required expenses probably won't do it for him.

But even if you are in the new 24% tax bracket, which is pretty darn high, you still get to keep 76%, and it adds to SS earning (don't know your age).

Well, you do have to subtract state income tax (if applicable), FICA taxes and the cost of exceeding any "cliffs" such as ACA, IRMAA or investment income tax levels.

 

[street]

There is really some good advise here and a few different ways to go or look at doing.

To answer a few questions ACA would be a problem for paying more for HI. I also might consider taking SS next year and that really causes some issues with my cost to HI.

The one thing is that this job is part time job so not sure they would give in payment any type of benefits. That would be an option if they would be able to do this type of thing.

No I don't need the money I do it for the social, exercise and it is all outdoor work. I love it.

I do like the charity giving advise very much. So can some one help out how I would go about giving my paycheck to charity? Would I receive the check then just give it all to charity or would it go directly to the charity?

 

[bUU]

I remember when we used to give out Target gift cards for the holidays and employees would ask me if it was considered taxable income. Of course we never reported it, but it is considered income by the government.

The company that I've been working for for the last 16 years put out a policy statement 3 or 4 years ago I think making it real clear that any rewards had to be experiential. So you could give, as a reward, a gift certificate to go out to dinner at a particular restaurant but you couldn't give them an American Express gift card for that amount of money.

 

[travelover]

Have them buy you real estate, then take out loans against the value of the property. Saves on taxes.

 

[meierlde]

I am assuming that this is a for profit company, if it were a non profit of course you could volunteer.

 

[harley]

The difference is when they get to retirement time, they will see little Social Security. The fraudulent income can never be invested in the stock market and cash cannot be put in the bank. It is difficult to invest in the economy.

The sub-economy people just have to keep on working and ER is seldom an option. There's just so much cash you can risk burying in paint cans in the backyard.

What are you talking about? I put cash in the bank all the time, and anything in the bank can be invested in the market or wherever. Unless you're talking about 10s of thousands of dollars at a time, it's no big deal.

I do agree about SS, though. That's why I would never work in the cash economy. Well, I would never work anywhere anymore, but I think it's important for young people to report income and pay into SS. They may not think it's important now, but someday they'll wish they had it.

 

[RetireAge50]

I don’t know if possible but I wonder if they could contribute directly to an existing account like Vanguard Charitable. Then you could give from there.

 

[CardsFan]

I do agree about SS, though. That's why I would never work in the cash economy. Well, I would never work anywhere anymore, but I think it's important for young people to report income and pay into SS. They may not think it's important now, but someday they'll wish they had it.

I have two friends that had their own businesses. Between the cash payments and the company "expenses", they were able report very low incomes for years.

They are now paying the price. One is retired, with a low SS benefit, and one is still working, putting in time for someone else to boost his SS.

 

[copyright1997reloaded]

Take as much of your pay as possible and contribute it to a 401k (assuming they offer one). When I was teaching as an adjunct (e.g. couple of classes), just about all of my pay when to a 457 plan. Thus, the only net taxes will be the employee portion of FICA/Medicare. While you eventually will have to pay taxes (subject to 70 1/2 RMD rules)

Some employers might have a 409 plan which is usually limited to key employees. It allows for compensation deferral until after you leave, and then can be paid back over a 10 year period. Again, this doesn't prevent taxes, it defers them.

 

[street]

^ that is a great idea I would be able to put all in to 401K because total income for the 4 to 5 month's of work is about $12000.

The question I have if I took SS would this effect SS if I put all earnings into a 401K at the present time. I know when I started taking it out then it would be considered income then taxes would be a part of SS bottom line.

 

[youbet]

I don’t know if possible but I wonder if they could contribute directly to an existing account like Vanguard Charitable. Then you could give from there.

A third party cannot contribute directly to your Vanguard charitable account. It would have to pass through you and thus be income that would show up on your W2 or 1099.

 

[Sue J]

Can you put all or some of it in a Traditional IRA - $5500+1000 (over 50)?

That's what I do with my small PT job income so that it doesn't impact our ACA subsidy. I put the gross pay into an IRA, a Traditional if I need to avoid taxable income or a Roth if it doesn't impact the subsidy, like in years where an HSA deduction takes care of that.