(10-18-2021 04:00 PM)RiceLad15 Wrote:  

(10-18-2021 03:44 PM)tanqtonic Wrote:  

(10-18-2021 03:10 PM)RiceLad15 Wrote:  

(10-18-2021 02:40 PM)tanqtonic Wrote:  

(10-18-2021 02:15 PM)Hambone10 Wrote:  I don't necessarily consider them menial. Some of them have the potential to make 6 figures (a waiter or sommelier at a high end restaurant) and take a certain skillset and attitude that not everyone has... but I think we're close enough for conversation. That said, I think workforce participation is low because people can work for a few months or work part time and then get tax credits to take home more money than if they work all year or full time... and although I didn't say it yet, I DO think there are some working now for cash but not reporting a thing... say the day care worker who now works privately and part time for just a few of the 'regulars' (with good kids) and its a win/win for both the parents and the worker. If you think about most of the jobs desperately hiring, I see a lot of 'personal services' people like hair stylists etc as well. Well, maybe they're working from home/in people's homes now.

Also remember that we arent dealing with *just* state and Federal income tax.

Someone working on a cash basis, in addition to the above, makes an additional 7.5% right off the bat with a cash gig in relation to SS taxes.

That is probably why I am not getting the tractor fixed at the JD place, but a guy whom several people at the feed shop threw my way.

And of course, the fix is being done tomorrow on a cash and carry basis.

But, I now know for a fact where one of the five John Deere vacancies has ended up at.

And I suspect that is why the shoring up and partial rebuild of the well house is being done on the same basis. The wellhouse dude is even having me pay his cohorts (and several no-show family members of his) so the aggregate out doesnt spark an IRS reporting requirement on my part and I still have a deduction. I have no idea how he plans to construct a dodge for the work on the irrigation cistern, pump, pressure housing, and outlet work from it.

So why the sudden increase/interest? There's been no new taxes or labor laws that would make it more appealing to work off the books.

Avoiding, at the very least, the 7.5% SS tax is appealing. As is the additional marginal Fed. withholdings.

That appeal was always there, but I would suspect that the demand for the specific vocational services wasnt previously as pent up as it is currently.

For some (in my case 'ranch engineers', and tractor repairs), I suspect the ability to find 'off the books' work is staggeringly easier than at anytime before. So yes, no new taxes or labor laws, but a demand that is seriously skewed out of whack.

Makes perfect sense for Wally to fix my tractor *now* at 85% of the shop charge, where he makes probably 170% of what he would make doing the same thing in the garage, and subject to at least another 25% taxation off the top when all is summed up.

Even with 6 personnel in place, the J. Deere place would *still* be seriously backlogged. There probably hasnt been an easier time for Wally to find 'off the books' cash than the present.

As noted, same is going for 'ranch engineering' projects. And, speaking with my Austin neighbor, basic things like gutters and simple plumbing projects.

So when you look at 'new taxes' and 'labor laws', I strongly suspect you are looking in the wrong place for this aspect.

Interesting - there's definitely pent up demand (which may actually be the wrong word), and we're seeing that ripple through the supply chain. Not only is there extra disposable income in the system because of COVID stimulus, but the travel and experiences that many people used to spend money on is being redirected to stuff (goods, home renovations, etc.).

I could see a second order affect of the increase in demand being the increase in labor in that area - and in some instances that labor going off the books. Though I hesitate to connect that directly to tax dodging but more related to something inbetween (like not wanting to go through the process of setting up an actual side business), as who knows whether or not Wally will report the income, given that it's likely to be a substantial source for Wally if that is his full time job.

Do you not think it might be more cutting out the middle man (i.e. boss/employer) as opposed to working under the table and dodging taxes?

Ask Wally. Anything over 600 clams, I have to file a 1099 to maintain a deduction on it. If I pay Wally the 700 for the work, and I dont file a 1099, a deduction on that 700 isnt allowable. But, if I pay Wally $450, and his helper son (who might have been there a total of fifteen mintues, if that) $250 --- no issue. I can even pay with a check to have a record.

It is amazing how many people avoid that 1099 --- kind of like garlic with a vampire. Or, it is amazing how many times I am told to note a plurality of people on the job. Or, the ranch engineer dude noting that that I should pay everyone on a job singly, and not a large single payment to him (who ostensibly will pay everyone else.)

If you are doing work in something that doesnt implicate a deduction (i.e. gutter work on my own house, instead of irrigation set up on a commercial operation), the issue of the 1099 goes away --- I cant get a deduction on the gutter work if it is treated properly. Of course, if I 'misclassify' the gutter work as happening on a commercial transaction, the issue of the 1099 comes back full force. (Hint, if you ever want a negotiation wedge with a sheetrocker, plumber, electrician, framing contractor for wood rot, etc and the terms are cash, or cash equivalent (check) --- say your house is a rental and you need the firm's information for 1099 purposes; 4 times out of 10 the contractor will pop 2-4% off the top to avoid that -- one wont budge, but the remainder will walk away)

As OO noted many moons ago, you learn a lot when you are the one doing the CFO work for your business.