Uber just doesn’t report your earnings to the IRS, it reports your mileage. I have found Uber reports more mileage than apps like MileIQ because Uber also counts the miles you drive to pick the person up (or to the restaurant), and, I don’t know, but it seems that Uber has a more… tight… definition of a ‘mile’ than MileIQ. 
Anyway, in the two years I used MileIQ, Uber always had a higher mileage count, so at least I got to deduct my MileIQ expense. 
I don’t get it. You make it sound like there’s no pressure to use that 5k for business expenses, like the fuel or the bobcat. How does that work? The only difference I see is that if you put the 5k on the books, you’ll have to pay taxes on it, so its real value is something less than 5k.
In which case, what you’ve described as “petty cash” is not at all different from payroll, rent, et al. If I’m wrong, please enlighten me.
It’s just another way of feeling justified in evading taxes.
I bet these same people get on Musk to pay his fair share.
Now you’re just using “there” improperly to mess with us.
What makes you think that well-to-do are doing the majority of this? I suspect the chief beneficiaries of this are very low income workers.
The point is that your social security primary insurance amount (PIA) isn’t a straight line calculation. In 2022 the first $1,024 of monthly inflation adjusted earnings is replaced at a 90% rate. The amount between $1,024 and $6,172 per month of earnings is replaced at a 32% level, and everything above that up to the maximum is replaced at a 15% rate. Social Security, as can be inferred by the name, is designed to be a benefit more valuable to lower paid workers.
Please you think some one that owns a business large or small that gets a cash payment claims it as income ? Remember this “ Behind all great fortunes lies a great crime. ‘ Honore de Balzac
Yes, lots of people do. Lots of people are honest and the savings aren’t really worth the potential trouble.
This “under the table” tax free contracting isn’t likely to work if there’s a rather large bill for “materials”. Like a previous poster said if the roofer is claiming he has done 20 roofing jobs but has purchased roofing materials for 50 he will have some explaining to do. However, if he’s a landscaper or a snow removal guy, that’s “labour intensive” and I’d suspect labour intensive jobs for cash would be easier to hide from the revenuers.
Surprised at the number of people who have never dealt with a contractor who gives you a list of SKU’s, quantities, and says ‘my guys will be there Thursday @ 8, make sure the supplies are there.’
I mean, I purchased the flooring and shingles for my last two major projects, even a 5 gallon tub of paint. The only things I usually don’t supply are nails, screws, and their tools.
Except for me, I guess. It wasn’t much but I claimed it when I was a full time consultant. Not worth the consequences in the unlikely event I would get caught.
I’ve never dealt with a contractor that didn’t want to mark up the materials.
I take my car to a mechanic who only accepts cash. Every so often he’ll tell me his delivery guy won’t be back this way for a few days, so if I can run to the auto-parts place and get xyz I can have my car back sooner. This is typically when the part is pricey. I always cooperate.
I will say that 25-30 years ago you did see M and MM in the wild (i.e. outside banking and securities trading). But it has been vanishingly rare in my experience for many, many years. The guidance has been to NOT use M and MM for thousands and millions in Corporate Finance, Municipal Finance and Personal Finance for some decades now. There were old farts who insisted upon it, but those people retired long ago. Now you just have the occasional pipsqueak who spends a few years in banking or trading and then comes out trying to insist that everyone in their new workplace is wrong. Needless to say they get hammered into submission pretty soon.
In external financial statements, the best practice is to either spell it out, or to note in the header or footer that all dollar amounts are in thousands or millions (“except per share amounts” is commonly appended).
Neither have I - and in fact there’s a sign I commonly see at mechanic’s shops saying you wouldn’t bring bacon and eggs to the diner and expect to pay just for the labor to cook them , so don’t bring parts to them and expect to just pay for the labor. Actual contractors in my area do the same - they want to mark up the materials. Handymen are another story - those guys are basically selling their labor and will expect me to provide paint or the door to be hung
Might be a San Antonio thing. I had my daughter’s room redone this spring after she moved out - took out the carpet, put laminate in there, scraped the ceilings, replaced the baseboards, and paint. For both the room and the walk-in closet.
Here is the estimate and the finished room.
The allure is that it never mixes with normal cash flow. Its off the books from taxes and that’s a small but helpful benefit. It’s also off the books for bankruptcy and garnishment. It’s off the books as far as stress, which is no small thing when you are constantly turning over very large amounts of money compared to actual profit. It pays the mortgage during the bad times. A lot off these people and tradespeople first bookkeepers second. Tradespeople have historically gone through pretty extreme boom and bust cycles.
So you have a hypothetical business that paid out 120k per year the last few year in profit. You built your home life based on that. Spouse, mortgage, kids are all accustom to 120k a year. For ease of this hypothetical, this business starts fresh on January 1st. How much do you pay yourself for the month of January? 120k/12 months = 10k per month, only you haven’t made 10k. A large, well capitalized business can pay on the assumption. A small construction business can’t. There’s no guarantee that 120k is coming this year. Now if you worked a few Saturdays off the books. Maybe a few neighbors flagged you down while doing other jobs and you’re sitting on 10k in cash. Your spouse never has to worry about buying groceries. The mortgage will get paid. You kids will never have to deal with somebody’s check not clearing.
The money involved with the business in unclear, weird, stressful, muddied and always changing. The cash money outside of the business is easy, clear, no stress. If it was all about the taxes, there are a lot better ways to screw the feds for a couple grand. The taxes are a benefit, just not the sole benefit.
This makes utterly no sense without some serious self deception going on.
Marking up parts and materials is standard practice almost everywhere. The local hot rod shop, the only place that I will let touch my car when I can’t or don’t want to do it myself does this too. Not an easy shop to get into without an appointment 2 weeks in advance.
For one thing, they can’t guarantee the parts if you supplied them, even if they are new. Some things are do-it-yourself and save money, other things are have someone else do it and accept how they want it done.
I own a small business, and I assure you I don’t make plans based on the assumption that I am going to make exactly the same amount of money in any given year, nor do I force myself to never spend more than one-twelfth of that hypothetical amount in a particular calendar month. You make plans based on the assumption that your income will vary, sometimes dramatically, from month to month and year to year. Failing to report income doesn’t make that planning any easier, except that it allows you to avoid taxes.