1sikbITCH
Diamond Member
- Jan 3, 2001
- 4,194
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Which means, most likely, that the proper deductions were not made. I may be wrong about this, but I am pretty sure if that is the case she will still be responsible for the applicable taxes.
She is probably better off not rocking the boat. If she goes after them in the proper legal channels, she may be guaranteeing that they will also find out about the back taxes she owes.
-KeithP
Here is my recollection (from this happening to a friend many years ago), and I could be wrong: Somehow the company gets reported. The labor board investigates and if they find wrong-doing they notify IRS that the company is paying under the table. IRS audits the company.
Once IRS confirms that you your earnings were not properly reported, the company is ordered to issue you a proper W4 and pay all of your back taxes just like they should have done originally. Additionally they can get fined/shut down.
In the case of the OP, as long as you can prove you worked the last 4 weeks, it seems that the labor board would force the company to pay you for those weeks.
Now when tax time comes around you will get a W2 from the company and report the income on your taxes and go about your business. If you don't get paid the last 4 weeks, it's not income and therefore you are not taxed on it.
Added consideration -
Whenever you work and pay taxes, you also pay into Social Security. Everyone hears how SSA is going broke and will likely not be around when we hit retirement age, but what happens if you should become disabled 5 years from now and need to file for disability? If you don't have enough work credits built up you are screwed, and will end up on SSI only, which SUCKS.
If you have the option, working on the books is preferable to working under the table.