Tax implications of a little on the side...

[bugjuice]

if someone has a main 9 ta 5 job (insert tui ad here) and took a little on the side, anything.. k'rd pimpin even (probably won't tho, like doing that for free)..
but if it was 'cash n hand' (or to bank account) stuff, how long could you go/push it before Mr Clark (sorry, Mrs) catches up and demands his (sorry! her) share? how would they find out? or is it more an 'honesty' thing? :dodge:

[ManDownUnder]

if someone has a main 9 ta 5 job (insert tui ad here) and took a little on the side, anything.. k'rd pimpin even (probably won't tho, like doing that for free)..
but if it was 'cash n hand' (or to bank account) stuff, how long could you go/push it before Mr Clark (sorry, Mrs) catches up and demands his (sorry! her) share? how would they find out? or is it more an 'honesty' thing? :dodge:

Dunno but I'm willing to bet the number of cashies that actually gets caught ain't too high.

I know their is a practice of "implied" revenue they can do when (say) a drug dealer get busted - they spend 2 nights in prison, they come out and the Tax Dept goes to visit them - get their share of the revenue (albeit ill gotten gains).

They look at the value of the house, the car the assets etc... and derive the level of income needed - then tax you on THAT

...nice...

[Finn]

I don't think the IRD have the resources to pursue hardened criminals like yourself buggy. However, If it's a lot, regular and you raise suspicion, they can access your bank records and have a crack.

Best bet is not to filter it through your bank account if you want to play safe. Use is for shopping, beer and bike bits.

Good on you by the way.

Edit: Oh yeah, I've been audited once. I was sweating like a rapist.

[Naki Rat]

if someone has a main 9 ta 5 job (insert tui ad here) and took a little on the side, anything.. k'rd pimpin even (probably won't tho, like doing that for free)..
but if it was 'cash n hand' (or to bank account) stuff, how long could you go/push it before Mr Clark (sorry, Mrs) catches up and demands his (sorry! her) share? how would they find out? or is it more an 'honesty' thing? :dodge:

Based on the experiences of a friend that got "a full audit" done on his (self employed) business matters, the IRD don't so much look for a paper trail but instead snoop around for the items that are commonly purchased with excess cash. For example where are the invoices/EFTPOS records for those appliances, vehicles, booze supplies, freezer contents? And where do you get the money for your Lotto, pubbing, TAB ?

The IRD also have a pretty accurate idea of the proportion of cash sales that a given type of business will experience and if you differ from the expected norm expect a visit from the auditors.

Forensic accounting is sort of like the idea that the best security system designers are ex-burglars.

Forwarned is definitely forarmed if you plan to do cashies on a regular basis. :nono: :innocent:

[Ixion]

Cash in hand. Do NOT pay it into your bank account. Either just pocket it and use it for day to day expenses (thus taking less out of your bank account), or if it's too much to carry round, get a safe deposit box.

Factors in getting caught are mainly lifestyle beyond means (IRD *do* monitor used car sales etc for large cash transactions). This isn't so much a problem when you have a regular job. ; disproportionate purchases , if a tradesman or retailer is skimming (ie you buy more stuff than you appear to be selling); and people dobbing you in.

So keep the money in your pocket, pick something that's labour only (or have the customer buy materials) , and don't let customers know your real name or any traceable contact details (use a prepaid cell phone) and you should be fairly safe , assuming we're talking a "bit extra' not "boot fulls of notes".

But if you DO get caught, it can be nasty.

[avgas]

do it!
screw the man!

[bugjuice]

so cruising round on a 1098 might raise some eyebrows?
it's not huge stuff, and not a 'habit' persay (anyone need any *cough* flyers made up *cough cough*).. just a little extra to help with what i don't have really.. still unser about it all yet :msn-wink:

[Brett]

I have been chased down by the IRD for this...best bet is keeping it in cash form, and using it to buy groceries and general things like that which wont raise suspicion.

[Guitana]

so cruising round on a 1098 might raise some eyebrows?
it's not huge stuff, and not a 'habit' persay (anyone need any *cough* flyers made up *cough cough*).. just a little extra to help with what i don't have really.. still unser about it all yet :msn-wink:

Nothing wrong with a little bit on the side but if you're talking, I just bought a 1098 with the proceeds, I would be a little concerned as to how you would explain that to the IRD if they came a knockin!! And I would definitely keep it to myself!!!!! You never know who's listening!!!
Don't use your personal or any bank account for that matter!!!

[spookytooth]

If your working full time on wages no one is going to take alot of notice of ya if you accidentaly get a bit of cash here and there :)like above posts take cash only no paper work or bank deposits. And rember if ird ask lie :) ya can always change a lie tell the truth and your stuck with it {Barry Crump }

[Ixion]

Just a thought. Sometimes it can be better to declare the income.

Because if you declare the income, then you can claim expenses.

And if the expenses happen to come to more than the income then , as a sole trader, you can set the shortfall against your income from employment. Thus acheiving a nice little overall tax deduction.

And it's quite remarkable how a little thought can reveal all sorts of expenses necessarily incurred in generating that income.

If asked, always say that , although the business does not AT PRESENT generate a net profit, you are working on it, and it is your intention to build it up to the point that it is profitable enough to become your main income source. Just takes a while , eh. All those expenses, they're INVESTMENTS intended to generate future revenue. Remember that. It's important. And noone can prove otherwise.

[scracha]

One word dude...paypal

[mstriumph]

........not "boot fulls of notes".

But if you DO get caught, it can be nasty. If you DO get caught you will be under observation for ever after ....... :mellow:

[Fub@r]

My last interaction with IRD I was complaining about the amount of Child Support I'm paying, and before anyone has a go at me there are good reasons for my complaint.

Anyway said with income tax, student loan and child support I was struggling. Guy at IRD office that I met with told me to find a "source of non taxable income". I said what you are telling me to do is to do cash work........he refused to comment. Told him he could get stuffed as if I was caught out he no doubt would be at the front of the queue to sting me.

Cash in hand is all good, like others have said use it for day to day expenses, but also make sure you use your taxed income from your account as well. Otherwise you might have a hard time explaining how you lived for a few months without touching your bank account if you were ever audited.

Lots of people do it, and just be sensible of how you dispose of it

[doc]

I don't think the IRD have the resources to pursue hardened criminals like yourself buggy. However, If it's a lot, regular and you raise suspicion, they can access your bank records and have a crack.

Best bet is not to filter it through your bank account if you want to play safe. Use is for shopping, beer and bike bits.

Good on you by the way.

Edit: Oh yeah, I've been audited once. I was sweating like a rapist.
Poor ole Dover

[Finn]

Poor ole Dover

He's doing fine mate. I'm weaning him off KB...

[The_Dover]

He's doing fine mate. I'm weaning him off KB...

who's the paedophile looking fella on the right?

[boomer]

who's the paedophile looking fella on the right?

is he stood on a box??

[doc]

who's the paedophile looking fella on the right?L or R which side you talkin about ? stage left or stage right

[paturoa]

I think some time in the future there will be (yet) another thread about how the tax rates are too high for wage and salary earners.......

[Finn]

I think some time in the future there will be (yet) another thread about how the tax rates are too high for wage and salary earners.......

It's not so much that that tax rate is too high in NZ, it's just that the government fucks around with our money. Are you aware of the $12 billion surplus? Where do you think that came from?

Edit: I don't believe I just said the NZ tax rate isn't too high. Dover gave me too much alchohol.

[Flyingpony]

If you suffer an accident while doing a cash job, will ACC cover you?

[JimO]

remember what they dont know wont hurt them, but cash has its limilations you can drink it, eat it, spend it on the holidays etc but any other purchases leave a paper trail. I had a full tax audit in the early 90s and at the end of that they gave me a form to fill in and as of then they have a list of all my assets, when they were bought and how much they cost so the next time i get done over they go through all my assets, work out how much i have earned and see if i have spent more than i have earned.

[doc]

If you suffer an accident while doing a cash job, will ACC cover you?
Yep they certainly will sunshine, just give them a bit more history and they are putty in your hands, till next financial year, then its their turn.

[paturoa]

It's not so much that that tax rate is too high in NZ, it's just that the government fucks around with our money. Are you aware of the $12 billion surplus? Where do you think that came from?

Yes sir-ee, lets combine both, rates too high (i.e. the surplus) and they piss it away - arrrggghhhh

http://www.kiwibiker.co.nz/forums/showthread.php?t=37027

I think this goes part way to explaining why black trade exists... it just pisses me that the pollies have no balls to do anything about it.

[Finn]

If you suffer an accident while doing a cash job, will ACC cover you?

Thank you for that wonderful insight to human responsibility. Perhaps if you focused a little more on getting of your lazy arse, you wouldn't have to worry about the losers safety net.

Are all kiwi's stupid or do they just act dumb so they fit into the crowd?

[Eurodave]

a LITTLE extra undeclared earnings is probably OK but, due to human nature, there is a very strong temptation to get greedy & when 'a little extra' becomes 'a lot extra', thats where the trouble starts. Try to fly under the radar