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Tax legalities

Discussion in 'Questions and Answers' started by Miamian, Apr 15, 2010.

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  1. Miamian

    Miamian Senior Member

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    A friend has facilitated my getting some extra work as an editor/content writer. She also works for the same company doing that work. Years ago, she had defaulted on her student loans and as a result now has trouble with her paycheck. She would like to arrange for the company to include her salary with mine, under my name and then she would reimburse me for the taxes paid. The company is based in the US and pays through US banks. I'm trying to make arrangements for them to pay without a US bank account.

    I'm not sure if it's legal to do that and if it isn't I won't want to.
     
  2. pennphinfan

    pennphinfan Stelin Canez Arcade Scorz

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    I'm assuming her wages are being garnished at this point. And let me tell you, having worked in the loan dept at my school for a number of years, the collection agencies will find out sooner or later. You may not get in legal trouble per se, but they could very well say that, hey, she's making wages through you, but we 'don't know' how much of your salary goes to her, so we'll assume... oh.. all of it. Then they'll garnish from your entire salary until her debts are repaid. So if anything you could end up not getting paid as much are you're supposed to be bc it may be going to repaying her loans.

    All that said, it sounds like what you would be doing would be illegal in some way, I'm just not sure what. Seems too good to be true. I don't think I've answered your question at all, but I would say you're definitely doing the right thing in checking on it before you commit. If no one on here knows a good answer, you could always call a lawyer and ask. They're not going to rat you out to the government or anything (at least I'd hope not!)
     
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  3. KeyFin

    KeyFin Season Ticket Holder Club Member

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    Without getting into extreme detail, what you are suggesting could draw red flags. She should explain some of the situation to the employer and ask to be paid under contract labor...in other words have no taxes taken out and she will deal with the IRS on her own. That's perfectly legal to do for both parties and that way you are not a middle man.

    I do a good bit of content writing myself and there's plenty of work online as well. Although you often need a Paypal account (and a 2nd bank account to verify it with), it would make more sense for her to proceed that way on a Paypal account you create for her. Once it verifies you can unlink your fiancial information then hand it over, and since they do not let you overdraft she couldn't hurt you financially. She could obtain a Paypal debit card and be good to go...essentially making cash money.
     
  4. Miamian

    Miamian Senior Member

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    Thanks. She has a paypal account, so that gets me wondering why she would need to do it this way.
     
  5. KeyFin

    KeyFin Season Ticket Holder Club Member

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    I agree, it does not fully add up. If she can't be completely honest up front and explain why the additional risks to you would be necessary, I can't see doing it.

    Then again, maybe she just does not understand her options. The IRS is ruthless, so maybe she's just scared to try on her own.
     
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  6. Paul 13

    Paul 13 Chaotic Neutral & Unstable Genius Staff Member

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    I wouldn't get involved if I were you. Whether you are a W2 employee or 1099 independent contractor, if her salary is included on yours, her paying you for "taxes" is not as simple as it sounds. It's completely illegal.
     
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