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jenniepepsi · May 14, 2009, 02:48 PM

I was recently talking to my daughters biologicall father, (we were never married, but are on speaking terms)

And I was helping him figure out his taxes, and I find out that all his life as an adult, he has been exempt from paying ANY state or federal taxes. :eek: this really confused me. He is american born and has never left the contry or anything. I cnat think of a single reason that he would be completely exempt from paying any taxes.

AtlantaTaxExpert · May 15, 2009, 11:29 AM

Jennie:

Income taxes are based on taxable income. Your daughter's biological father may be getting income which is NOT taxable (Social Security Disability Income is an example, as is private disability insurance for which he paid the premiums).

Further, income levels under certain amounts are subject to income taxes, but deductions and exemptions may result in no income tax being due.

Finally, he may simply be receiving income which has no paper trail and thus is illegally not paying the income tax that is due.

jenniepepsi · May 15, 2009, 12:18 PM

Ahh that explains it. He works for a privately owned 'mom and pop' restaurant and they pay him with a check that LOOKs a lot like a personal check, but has a tax section on it. But they never put anything on the tax section

Thank you hon :)

AtlantaTaxExpert · May 15, 2009, 02:21 PM

Glad to help!

MukatA · May 16, 2009, 11:05 PM

Originally Posted by jenniepepsi

ahh that explains it. he works for a privately owned 'mom and pop' restaraunt and they pay him with a check that LOOKs alot like a personal check, but has a tax section on it. but they never put anything on the tax section
thank you hon :)

He must report the income on his tax return. Is he getting W2 or 1099-misc? If he is not an employee and is getting 1099-misc, then he must file tax return if income is $400 or more. His income is also subject to SE tax at 15.3%.

AtlantaTaxExpert · May 18, 2009, 01:19 PM

Mukata:

It's not that simple. It is apparent that this man is working "off the books" in collusion with his employer.

This happens a lot more in this country than most people care to admit, and is one of the foundation arguments for a flat sales tax or other consumer-based tax, to catch those who are employed in the "underground" economy.

Fr_Chuck · May 18, 2009, 02:00 PM

Yes he is not really exempt, he is not legally reporting his income.

Of course he is also not earning or paying any social security taxes, or unemployment so he may not be able to collect those latter either

AtlantaTaxExpert · Jun 15, 2009, 09:27 AM

FR Chuck:

While not being able to claim unemployment MAY be an issue, anyone under the age of 40 who has ANY expectation of collecting Social Security is, In my opinion, deluding himself!

Numbers do not lie! Social Security, as we know it, will not exist 25 years from now. The money will NOT be there to pay the benefits!

The sooner Congress and the American people recognize that fact and make the needed reforms to correct the problem, the better for everyone!