May 06, 2008

Curious Tax Man: Very exciting tax question

A client wants to give me a large check to use to create several PPC accounts. the check is in my name, would be cashed/deposited by me to use to create the google etc accounts. this money is not income, so naturally I do not want to pay taxes on it. Is it as simple as not claiming that money next year or should I (or client) do something to designate that money as "not mine" and "not income"? thanks!

  • I'm by no means an expert, but if your client gives you a personal check that is being drawn from their account, then it will not be reported to the IRS (anything over $10,000 in cash would be reported by your bank to the IRS, but personal checks are not considered "cash"). I think it might be as simple as not claiming this as income. Surely there is another monkey out there who knows better than I...
  • more info: it's a business check for $13k
  • I suspect that you'll need to keep track of/document the expenses you're going to pay with the check. Will the business issuing the check send you one of those IRS forms at the end of the year, reporting the $13,000 as income? I believe they're required to for cumulative payments to one person over a certain amount. If so, the IRS will be checking your tax return for the income and any offsetting expenses.
  • You will receive $13K in income, and you will pay $13K to AdSense, an expense on behalf of the client. They cancel.
  • That may be true, depending on how well Medusea can document her expenses, but if she's getting a cut, that would be taxable income.
  • I'm not getting any of the money. my pay comes out of a separate budget item. isn't capn. r a tax atty? capn???
  • If I was in your situation I would ask your client to open a checking account and give you the debit card to use. If you're spending the money on their behalf I don't see why you should have to take possession of it and risk tax liability.
  • *seconds waxboy*
  • *delurks from drug-addled insomnia* Sorry, snakey -- most definitely not a tax attorney. Me and the law school sorta made a deal where they'd push me onto the back end of the Income Tax Law bell-curve and give me a diploma, if only I promised to get the hell out of there and leave the math to the professionals. *pops leftover Percocet found behind the rads, relurks*
  • are you ok Louie? thanks all for help! we're going to do it a different way so I can avoid the tax ramifications.
  • For those who don't know...the good Captain injured himself in a bizarre gardening accident.
  • thanks for the info rocket
  • it was a gnome attack, wasn't it?
  • I'm sure there's a snark in there I can make about the Cap'n and an uncooperative ho...