General Question

MrGV's avatar

If I were to be paid by only cash, how would I prove my income?

Asked by MrGV (4126 points ) February 24th, 2010

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14 Answers

grumpyfish's avatar

You mean for, e.g., getting a loan?

If you’re getting paid cash, above the table, you should be getting a 1099, which works as proof of income.

MrGV's avatar

Yeah, I’m trying to move into an apartment that requires a proof of income..THANKS!

DarkScribe's avatar

If you have no tax records then you probably cannot provide proof of income.

JLeslie's avatar

Tax records. If you are working under the table, you can’t prove income. If it is above the table @grumpyfish is right, you would get a 1099, and/or your employer might be able to write up something for you. Your apartment might let you pay 6 months up front if you cannot prove income.

grumpyfish's avatar

Additionally, most apartments will accept an employment contract as proof of income.

john65pennington's avatar

Generally, no one pays a salary in cash, unless they have something to hide.

Being paid “under the table” is a federal income tax violation.

grumpyfish's avatar

@john65pennington Generally no, but some industries do pay in cash b/c of a history of bad finances (i.e., fear of getting a bad check). Doesn’t happen much now, but still occasionally comes up.

It’s also possible to get paid cash from lots of individual sources, that is, if I were an independent plumber who mostly got paid in cash. If the individual payments were under some amount (I think $500, maybe $800), they wouldn’t be required to give me a 1099. I would be required to file income taxes on that money.

Which, @MrGeneVan, is another way to prove income—e.g., last two year’s tax filings.

CMaz's avatar

If it is under the table. You don’t or you will have to pay tax, most likely with penalties.

And, the person that was paying you could also get into “trouble” for not reporting your income.

CyanoticWasp's avatar

If you’re being paid in cash and it’s legitimate, then you’re still getting a weekly wage statement, W2 at the end of the year, etc. I used to make a cash payroll (my last one was in 1977), and I can assure you that every man on the job received the exact amount of cash due… and a slip showing his gross and every deduction for taxes, FICA, H&W, union dues, etc. I also wrote the checks each month to the union H&W and Pension funds. (FICA, state and federal taxes were paid from the home office.)

BoBo1946's avatar

Barbers work this way (mostly)....paid in cash! But, the IRS are very good at estimating their income.

susanc's avatar

If you aren’t trying to hide your income with the right hand while the left hand wonders how
to prove you have it, call the IRS and ask them what to do.

semblance's avatar

I am an attorney. Besides having a regular law degree I also have a Masters of Law in Taxation. Do not take this as creating an attorney-client relationship. However, you may find my opinion helpful.

If you are not getting meangingful answers here, the trouble with your question as phrased. When you say you are only paid in cash, are you talking about steady employment or, instead, are you someone who does work for various people and are paid in cash.

Most of the other posters are assuming that you have a regular job with one employer. If so, it would be unusual for your employer to pay you cash, but even if your employer did so, there should be a Form W-2 (not a 1099) stating your wages, the amounts withheld for taxes, etc. That could be used to prove income. If you are getting paid “under the table”, that would be a tax violation for your employer and you. Also, as others have pointed out, it would be difficult for you to prove your income for something like qualifying for a loan.

However, for all I know, you may just be providing services to various persons for cash. Just this morning I paid the farrier who put shoes on my horses. Last year I hired several people who were out of work to help me with various projects on my property. These were working as independent contractors, not employees. As a private individual, hiring services not related to my business, I was not obligated to withhold anything from the income of any of these people nor was I obligated to give them a Form W-2 or Form 1099. It is up to them to report their income.

If you are in business for yourself, giving services to various persons, you need to set up a system for keeping good records of cash receipts and bank deposits. Any certified public accountant can help you with that. You can then report taxable income, business deductions, make quarterly tax payments, and establish a legitimate and credible income history which can be used for other purposes, like applying for a loan, credit card, or renting an apartment.

solowthe1's avatar

I am a taxi driver. I make most of my money by tips. I was trying to rent a flat screen for my house for football sunday and I needed to prove the cash income I made with tips. I found a website called www.provemyincome.350.com that helped me prove my cash income.

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