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    Rich_Girl's Avatar
    Rich_Girl Posts: 1, Reputation: 1
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    #1

    Jan 16, 2007, 04:46 AM
    Can I hide my income in an offshore bank account if I am a 1099 contractor?
    I just took a position as a loan officer. Income will be high and so will be taxes. If I am an independent contactor, can I hide some of the income in an offshore bank account? I know that no one will advise upon it I understand that. But how do people get away with it? What kind of work field would you be in in you are not reporting income?
    RickJ's Avatar
    RickJ Posts: 7,762, Reputation: 864
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    #2

    Jan 16, 2007, 04:56 AM
    I'm not the tax guru but I think the a key is where you earned the income. Your company will report to the IRS what is on your 1099 - so the IRS will know what you were paid and the'll want the tax on it.

    Besides outright illegal evading, I think people avoid taxes by earning income from companies outside of the US.

    ... mostly just speculating...

    With a large increase in income, you should get seek advice on good tax shelters for the extra amount.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
     
    #3

    Jan 16, 2007, 07:39 AM
    As Rick pointed out, you can't hide income that is paid by the company. Whatever they report either via W-2 or 1099 is reported to the IRS as well. So if the declared income on your tax return doesn't match what's reported, the IRS WILL catch it. Besides, this site will not promote or condone illegal actions.

    What you CAN do is hire a good tax specialist who can advise you how to minimize your taxable income. As an independent contractor you lose a lot of tax benefits of pretax deductions like 401(k)s etc.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,305, Reputation: 7692
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    #4

    Jan 16, 2007, 07:48 AM
    There are several things, first if they are paying as noted with a 1099, then that 1099 will go directly to the IRS so they know what you were paid.

    So when you report your income, they already know about what you made, they are only waiting to see other income not already reported.

    Also cash and large money transfers over 9999.99 are reported also, so if you merely transfer money the trial of it is left. ( actually the trail of all money is there, but not reported, but IRS can find the trail of any money if they want to)

    As a 1099 employee there are a lot of ways to lower your tax, retirement accounts, business expenses and the such.

    If you have large amounts of cash and you are making a lot of interest on the money to pay tax on, there are ways to put that into varioius accounts, which of course may or maynot be legal depending on how it is done
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
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    #5

    Jan 16, 2007, 10:54 AM
    Quote Originally Posted by Rich_Girl
    I just took a position as a loan officer. Income will be high and so will be taxes. If I am an independent contactor, can I hide some of the income in an offshore bank account? I know that no one will advise upon it I understand that. But how do people get away with it? What kind of work field would you be in in you are not reporting income?
    Hello Rich Girl:

    I don't think you're as rich as you think you are. The REALLY rich don't work for waqes, and don't have 1099's. They own companies, and trusts, and Roth IRA's, and cattle herds, and oil rigs and things - all of which is beyond you (except for the Roth IRA).

    When you don't have income, it's easy to NOT pay taxes. A lot of wealthy people arrange their affairs so that they don't have income. That's called avoiding taxes (a very patriotic thing to do), vs. evading taxes (which will land your butt in the slam).

    excon
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,814, Reputation: 846
    Senior Tax Expert
     
    #6

    Jan 16, 2007, 08:18 PM
    ExCon's explanation has a bit of attitude attached to it, but it IS essentially accurate.

    Fr Chuck's and Scott Gem's comments are also valid!

    A good tax pro will be able to help you reduce our taxable income by claiming valid tax deductions.

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