Home repair - paying cash (dollar bills)

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FoolMeOnce
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Home repair - paying cash (dollar bills)

Post by FoolMeOnce » Mon Sep 30, 2019 3:00 pm

I have contracted with someone to do some work on my house for $6000. I found the company through Yelp, plenty of reviews, but it appears they then sub out to non-employers. So I am paying the worker directly.

He offers a 5% discount for paying cash. Physical bills, not just other forms of instant payment. The other options without the discount are cashier's check or through Zelle.

Cash would save $300. But I'm hesitant to do so. Is there any reason to be wary?

Breezy
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Re: Home repair - paying cash (dollar bills)

Post by Breezy » Mon Sep 30, 2019 3:12 pm

I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.

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ResearchMed
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Re: Home repair - paying cash (dollar bills)

Post by ResearchMed » Mon Sep 30, 2019 3:19 pm

Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
We strongly prefer paying with credit cards (for backup), but there have been times when a smaller contractor didn't use them.

But in those cases, we ALWAYS paid with a check, never, ever actual "cash".
It would be awfully messy to prove payment if anything ever came to that much of a dispute, even with what is likely to be an informal written receipt.

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Breezy
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Re: Home repair - paying cash (dollar bills)

Post by Breezy » Mon Sep 30, 2019 3:24 pm

Right, and with a project of this size, you might not know what corners have been cut until the guy is long gone. I do pay cash sometimes for small things, say less than $300, but I wouldn't for work of this scope.

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Re: Home repair - paying cash (dollar bills)

Post by DesertDiva » Mon Sep 30, 2019 3:27 pm

If you have a problem and need to take him to court, how can you prove you paid for his services? Is he licensed? Does he provide an insurance certificate? Is his estimate in writing, or just verbal?

barnaclebob
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Re: Home repair - paying cash (dollar bills)

Post by barnaclebob » Mon Sep 30, 2019 3:29 pm

What kind of work is it? How good are you at inspecting this kind of work and how likely is it that it could appear good but then fail prematurely?

If it was say framing a finished basement or installing carpet then I might be comfortable with cash. A tile shower? Not comfortable with cash.

But if he gives you a receipt of any kind then cash should be as good as anything else. Most people will pay with a check and once that's gone through you can't claw it back either and would have to go to court.

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MrBobcat
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Re: Home repair - paying cash (dollar bills)

Post by MrBobcat » Mon Sep 30, 2019 3:34 pm

Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
That and I'd also be a bit worried about potential liability. Doubt these guys are paying workers comp insurance either.

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8foot7
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Re: Home repair - paying cash (dollar bills)

Post by 8foot7 » Mon Sep 30, 2019 4:31 pm

I would have no problem with this as long as he signs a notarized lien waiver for you. It's worth $300 to me to go to the bank to get cash, and he can have the bank staff notarize the lien release while I make the withdrawal.

Something like this should be fine:

IN RELATION TO: Contracting job at [your address] (the Project) for [yuor name] (the Owner)
For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned Contractor hereby waives, discharges, and releases any and
all liens, claims, and rights to liens against the above-mentioned Project, and any and all other
property owned by or the title to which is in the name of the above-referenced Owner and
against any and all funds of the Owner appropriated or available for the
construction of said project, and any and all warrants drawn upon or issued against any such
funds or monies, which the undersigned Contractor may have or may hereafter acquire or
possess as a result of the furnishing of labor, materials, and/or equipment, and the performance
of Work by the Contractor on or in connection with said project, whether under and pursuant to
the above-mentioned contract between the Contractor and the Owner pertaining to said project
or otherwise, and which said liens, claims or rights of lien may arise and exist.
The undersigned further hereby acknowledges that the sum of
Dollars ($ ) constitutes the entire unpaid balance due the undersigned in
connection with said project whether under said contract or otherwise and that the payment of
said sum to the Contractor will constitute payment in full and will fully satisfy any and all liens,
claims, and demands which the Contractor may have or assert against the Owner in connection
with said contract or project.

______ signed by contractor
Notary section

As far as he and his taxes go, well, that's between the IRS and him. "Justice means minding one's own business and not meddling with other men's concerns." -Plato

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FoolMeOnce
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Re: Home repair - paying cash (dollar bills)

Post by FoolMeOnce » Mon Sep 30, 2019 4:52 pm

barnaclebob wrote:
Mon Sep 30, 2019 3:29 pm
What kind of work is it? How good are you at inspecting this kind of work and how likely is it that it could appear good but then fail prematurely?

If it was say framing a finished basement or installing carpet then I might be comfortable with cash. A tile shower? Not comfortable with cash.

But if he gives you a receipt of any kind then cash should be as good as anything else. Most people will pay with a check and once that's gone through you can't claw it back either and would have to go to court.
Exterior painting.

The company called and said they'd give me 3% off for payment via Zelle, so I'll go that route.

6Pack
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Re: Home repair - paying cash (dollar bills)

Post by 6Pack » Mon Sep 30, 2019 4:59 pm

When negotiating with contractors I always ask for the cash rate. I’ve only had one person say credit cards and cash are the same price.

I’d have no worries - I’ve been hiring contractors like this for years (home repair, auto repair, landscaping, etc...)

In fact, I needed some flashing repaired before a hurricane was coming, but my roofer was swamped. Once I said it’d be cash he was out that day. I’m a firm believer in paying cash when negotiating services.

EDIT: When my wife was working and we needed daycare, I got 15% off by paying cash.

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Re: Home repair - paying cash (dollar bills)

Post by abuss368 » Mon Sep 30, 2019 5:08 pm

Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
Well said and I agree. Cash under the table? What happens when something is not done correctly?
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LiterallyIronic
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Re: Home repair - paying cash (dollar bills)

Post by LiterallyIronic » Mon Sep 30, 2019 5:09 pm

I have always and only paid cash for all contractors, electricians, plumbers, or other repair/maintenance people. And they never give me a receipt, so I assume they're doing it under the table, but that's not my problem. They just fix my broken stuff and then I give them the money. No need to over-complicate things: https://www.youtube.com/watch?v=rWlNesxOGrU

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FoolMeOnce
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Re: Home repair - paying cash (dollar bills)

Post by FoolMeOnce » Mon Sep 30, 2019 6:14 pm

6Pack wrote:
Mon Sep 30, 2019 4:59 pm
When negotiating with contractors I always ask for the cash rate. I’ve only had one person say credit cards and cash are the same price.
I'm accustomed to a cash discount versus credit card. But Zelle/QuickPay/Venmo/etc is usually treated as cash, since it is an instant movement between accounts.

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Doom&Gloom
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Re: Home repair - paying cash (dollar bills)

Post by Doom&Gloom » Mon Sep 30, 2019 6:21 pm

I frequently pay repair and service people in cash--but only after they have done previous jobs for me. I never pay a "new" worker in cash unless it is something very, very minor.

Broken Man 1999
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Re: Home repair - paying cash (dollar bills)

Post by Broken Man 1999 » Mon Sep 30, 2019 6:23 pm

I believe if someone is willing to cheat on their taxes, they probably will be willing to cheat me as well. I see no reason to help them. If all they were doing was trying to save CC fees, the honest ones would be happy to take a check. And they do, never had one that didn't. I have been asked if I would pay cash, but I never do. I tell them my CU is just up the road, they can cash the check immediately.

A single trades person doesn't need for me to pull down his/her margin, so I don't use a CC even if they would take one. OTOH, with a large company I use credit cards as usually the person that shows up is unknown to us so I have a better chance to protect myself from a bad repair/activity, plus, the companies probably wouldn't want their people collecting anyway.

DW vets the people who perform larger $$$ activities to be sure the contractor has licencees (if needed), and to make sure their insurance is up to date. That was the responsibilities of her last career stop, vetting contractors for an international MegaCorp. Surprisingly, many who filled out the forms stated they had the various coverages/liscenses, yet were found not to have them. Lots of liars out in business land. Shocking! :shock:

I can't control the individual workers if they work for a contractor, but I can totally work with vetted contractors. So we do.

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Re: Home repair - paying cash (dollar bills)

Post by ThriftyPhD » Mon Sep 30, 2019 6:30 pm

DesertDiva wrote:
Mon Sep 30, 2019 3:27 pm
If you have a problem and need to take him to court, how can you prove you paid for his services? Is he licensed? Does he provide an insurance certificate? Is his estimate in writing, or just verbal?
++

If his 'non-employees' get hurt while up on a ladder, does he have insurance for them, or will you be paying their medical out of pocket?

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Re: Home repair - paying cash (dollar bills)

Post by 6Pack » Mon Sep 30, 2019 8:01 pm

ThriftyPhD wrote:
Mon Sep 30, 2019 6:30 pm
DesertDiva wrote:
Mon Sep 30, 2019 3:27 pm
If you have a problem and need to take him to court, how can you prove you paid for his services? Is he licensed? Does he provide an insurance certificate? Is his estimate in writing, or just verbal?
++

If his 'non-employees' get hurt while up on a ladder, does he have insurance for them, or will you be paying their medical out of pocket?
If you are in a contributory negligence state this is a non-issue.

TallBoy29er
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Re: Home repair - paying cash (dollar bills)

Post by TallBoy29er » Tue Oct 01, 2019 7:58 am

Tactical point overlooked so far. Some discount for cash is to be expected. There is an approx. 2-3% fee incurred by a merchant accepting credit cards. ACH via Zelle I do not know, but would expect little to no fee, so I can understand a discount for that as well.

Andyrunner
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Re: Home repair - paying cash (dollar bills)

Post by Andyrunner » Tue Oct 01, 2019 8:05 am

All contractors do this.

I'd say you could even negotiate the 5% discount. I think a more reasonable discount is 10-15%. I had a sheet rocker give me a 10% discount when I paid him in cash.

Mr. Rumples
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Re: Home repair - paying cash (dollar bills)

Post by Mr. Rumples » Tue Oct 01, 2019 8:12 am

My state, Virginia, might be unique, but I doubt it. If you choose a licensed contractor or tradesperson by the Commonwealth and the work is done improperly or dishonesty, you can of course them to court. If, they fail to pay a judgment, you don't have to pursue them further. Rather, consumers who have incurred losses through the improper or dishonest conduct of a licensed residential contractor can file a claim with the Contractor Recovery Fund. The fund is supported entirely by assessments paid by licensed contractors, not by any tax revenues. This recourse is not lost in cash transactions.
Last edited by Mr. Rumples on Tue Oct 01, 2019 8:14 am, edited 1 time in total.

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Nate79
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Re: Home repair - paying cash (dollar bills)

Post by Nate79 » Tue Oct 01, 2019 8:14 am

I would use cash before ever using Zelle. You have zero protection with Zelle and Clark Howard rails against using Zelle in everything but for really close friends.

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FoolMeOnce
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Re: Home repair - paying cash (dollar bills)

Post by FoolMeOnce » Tue Oct 01, 2019 8:36 am

Nate79 wrote:
Tue Oct 01, 2019 8:14 am
I would use cash before ever using Zelle. You have zero protection with Zelle and Clark Howard rails against using Zelle in everything but for really close friends.
What recourse is available for cash that is not for Zelle? With Zelle at least I can prove I paid.

FYI I'm paying 30% down, 70% upon satisfactory completion.

JackoC
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Re: Home repair - paying cash (dollar bills)

Post by JackoC » Tue Oct 01, 2019 10:33 am

6Pack wrote:
Mon Sep 30, 2019 4:59 pm
When negotiating with contractors I always ask for the cash rate. I’ve only had one person say credit cards and cash are the same price.

I’d have no worries - I’ve been hiring contractors like this for years (home repair, auto repair, landscaping, etc...)

In fact, I needed some flashing repaired before a hurricane was coming, but my roofer was swamped. Once I said it’d be cash he was out that day. I’m a firm believer in paying cash when negotiating services.

EDIT: When my wife was working and we needed daycare, I got 15% off by paying cash.
Same here on the frequency of this practice. I just had some roof repairs and all three contractors quoted a discount for cash (ie C notes), which I did ask them to quote, but none of them seemed to think it strange. Because it's basically standard, here (NY area). I generally have trouble seeing how it's my business how they fill out their income taxes. That has come up on a bunch of threads, might be regional or ethnic subcultural thing, people feeling that is somehow their business. I don't see that, but there are varying customs in a big diverse country besides varying individual opinions.

On how it relates to your position in a warranty sort of situation I could definitely see that if it's credit card v 'cash' (as in check or C notes) because you might get some purchase protection from the card (as well obviously as some cash back % from the card). Check v C notes it's really only the greater proof that you actually paid with a check, but I don't worry about that much with somebody I've vetted (people I know, Angie's List, Home Advisor, Yelp etc) enough to let them anywhere near my house to begin with, and I get a signed receipt.

Also tends to sort itself out on project size. We did a major kitchen redo 4 yrs ago, contractor's share (even minus cabinets, appliances, etc we bought separately) was $20k+. I wouldn't do that in C notes, and they wouldn't be expecting it. The winning roof repair bid recently though was $2200 for cash, $2600 or $2800 I think was the first number, no second thought on that. But also when I get a quote and ask 'but can you do better if I pay cash?' I'm also partly just asking 'can you do better'? I don't consider the reduction in the second number out of their mouths to necessarily really be 100% because cash.

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Nate79
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Re: Home repair - paying cash (dollar bills)

Post by Nate79 » Tue Oct 01, 2019 11:47 am

FoolMeOnce wrote:
Tue Oct 01, 2019 8:36 am
Nate79 wrote:
Tue Oct 01, 2019 8:14 am
I would use cash before ever using Zelle. You have zero protection with Zelle and Clark Howard rails against using Zelle in everything but for really close friends.
What recourse is available for cash that is not for Zelle? With Zelle at least I can prove I paid.

FYI I'm paying 30% down, 70% upon satisfactory completion.
If you transfer money with Zelle no matter where or how much you enter you have zero recourse if a mistake is made. If you accidentally send to the wrong address or the wrong amount you have zero recourse no matter that you have a record or not. In that sense it is basically like sending a pile of cash. Except when you hand the guy cash you at least know how much you are giving and you know you are giving to him. Physically you could have a written proof of the transaction of cash. With Zelle your record of transfering money is worth nothing.

rich126
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Re: Home repair - paying cash (dollar bills)

Post by rich126 » Tue Oct 01, 2019 11:58 am

I've paid cash, rarely, and when I did, I made sure to get a receipt for the payment.

Personally I prefer the credit card route.

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Re: Home repair - paying cash (dollar bills)

Post by Spirit Rider » Tue Oct 01, 2019 12:02 pm

MrBobcat wrote:
Mon Sep 30, 2019 3:34 pm
Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
That and I'd also be a bit worried about potential liability. Doubt these guys are paying workers comp insurance either.
Not to mention, they almost certainly do not have liability insurance for damage they cause.

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Re: Home repair - paying cash (dollar bills)

Post by Tortoisesque » Tue Oct 01, 2019 6:54 pm

I would personally be hesitant to pay any contractor a large amount of physical cash (e.g., hundreds or thousands of dollars), mainly because of the possibility that they or someone they know might return later to burglarize your house under the assumption that you keep fat wads of cash somewhere.

A man in my neighborhood was killed during a burglary, and the thief escaped with a safe. My guess is that the burglar either knew about the safe or knew the man used large amounts of cash and that it was the main reason he targeted the house.

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Re: Home repair - paying cash (dollar bills)

Post by ThriftyPhD » Thu Oct 03, 2019 6:27 pm

6Pack wrote:
Mon Sep 30, 2019 8:01 pm
ThriftyPhD wrote:
Mon Sep 30, 2019 6:30 pm
DesertDiva wrote:
Mon Sep 30, 2019 3:27 pm
If you have a problem and need to take him to court, how can you prove you paid for his services? Is he licensed? Does he provide an insurance certificate? Is his estimate in writing, or just verbal?
++

If his 'non-employees' get hurt while up on a ladder, does he have insurance for them, or will you be paying their medical out of pocket?
If you are in a contributory negligence state this is a non-issue.
Reading up on this, there are only a few states that have this, and it requires they be found 10% or more at fault for the injury. So that wouldn't be decided until after you've gone to court, paid your legal fees, etc.

Again, willing to risk that so someone can avoid paying taxes?

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Re: Home repair - paying cash (dollar bills)

Post by ThriftyPhD » Thu Oct 03, 2019 6:33 pm

JackoC wrote:
Tue Oct 01, 2019 10:33 am
I generally have trouble seeing how it's my business how they fill out their income taxes. That has come up on a bunch of threads, might be regional or ethnic subcultural thing, people feeling that is somehow their business. I don't see that, but there are varying customs in a big diverse country besides varying individual opinions.
Depends on how you see yourself as a part of society and what role government serves in that society. In my opinion, we all vote on things to spend government dollars on, and we vote on how to pay for those things with taxes. Someone committing tax fraud isn't paying their share, and those costs just get passed on to everyone else. They're stealing from everyone, and they're unfairly competing against companies that do pay their taxes.

For the record, I'm also not supportive of people committing insurance fraud, because in the end that just get passed off as a cost to everyone else.

I'm not going to run around as the tax or insurance police, but I'm not going to willingly contribute to the problem either.

Would you hire a contractor if you knew they were going to rob your neighbor's house after finishing the job?

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Re: Home repair - paying cash (dollar bills)

Post by michaeljc70 » Thu Oct 03, 2019 6:34 pm

abuss368 wrote:
Mon Sep 30, 2019 5:08 pm
Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
Well said and I agree. Cash under the table? What happens when something is not done correctly?
Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.

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Re: Home repair - paying cash (dollar bills)

Post by soccerrules » Thu Oct 03, 2019 6:37 pm

Breezy wrote:
Mon Sep 30, 2019 3:24 pm
Right, and with a project of this size, you might not know what corners have been cut until the guy is long gone. I do pay cash sometimes for small things, say less than $300, but I wouldn't for work of this scope.
Agreed. I have done this on a few occasions for tree/yard work. I would not feel comfortable above $5-600
Don't let your outflow exceed your income or your upkeep will be your downfall.

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Re: Home repair - paying cash (dollar bills)

Post by aerosurfer » Thu Oct 03, 2019 7:06 pm

I just replaced my whole HVAC system, asked all the companies who came out what the cash price was. On average it was 5-8% lower than financing.

The company I went with, I tried to bargain further, on the dead president special, but they didnt budge, whether it was 100s, check or credit card. So I just put it on my card, took some cash back and got another month to pay for it and hold my cash
Last edited by aerosurfer on Thu Oct 03, 2019 9:41 pm, edited 1 time in total.

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Re: Home repair - paying cash (dollar bills)

Post by abuss368 » Thu Oct 03, 2019 7:16 pm

michaeljc70 wrote:
Thu Oct 03, 2019 6:34 pm
abuss368 wrote:
Mon Sep 30, 2019 5:08 pm
Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
Well said and I agree. Cash under the table? What happens when something is not done correctly?
Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.
Based on experience. We had a contractor take an initial deposit (never again) and not do the work. It took 1 -2 years to get it back. The magistrate required a lot of forms to be completed. We had a copy of the cashed check. They told us it was good we did not pay in cash.
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Re: Home repair - paying cash (dollar bills)

Post by michaeljc70 » Thu Oct 03, 2019 8:06 pm

abuss368 wrote:
Thu Oct 03, 2019 7:16 pm
michaeljc70 wrote:
Thu Oct 03, 2019 6:34 pm
abuss368 wrote:
Mon Sep 30, 2019 5:08 pm
Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
Well said and I agree. Cash under the table? What happens when something is not done correctly?
Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.
Based on experience. We had a contractor take an initial deposit (never again) and not do the work. It took 1 -2 years to get it back. The magistrate required a lot of forms to be completed. We had a copy of the cashed check. They told us it was good we did not pay in cash.
No difference than having a receipt like I said.

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Re: Home repair - paying cash (dollar bills)

Post by abuss368 » Thu Oct 03, 2019 8:23 pm

michaeljc70 wrote:
Thu Oct 03, 2019 8:06 pm
abuss368 wrote:
Thu Oct 03, 2019 7:16 pm
michaeljc70 wrote:
Thu Oct 03, 2019 6:34 pm
abuss368 wrote:
Mon Sep 30, 2019 5:08 pm
Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
Well said and I agree. Cash under the table? What happens when something is not done correctly?
Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.
Based on experience. We had a contractor take an initial deposit (never again) and not do the work. It took 1 -2 years to get it back. The magistrate required a lot of forms to be completed. We had a copy of the cashed check. They told us it was good we did not pay in cash.
No difference than having a receipt like I said.
For us having the receipt and copy of the cash check was key with the magistrate! Thank goodness for the trail. Hopefully no one experiences the same as it was an experience and not fun.

Best.
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Re: Home repair - paying cash (dollar bills)

Post by michaeljc70 » Thu Oct 03, 2019 8:25 pm

abuss368 wrote:
Thu Oct 03, 2019 8:23 pm
michaeljc70 wrote:
Thu Oct 03, 2019 8:06 pm
abuss368 wrote:
Thu Oct 03, 2019 7:16 pm
michaeljc70 wrote:
Thu Oct 03, 2019 6:34 pm
abuss368 wrote:
Mon Sep 30, 2019 5:08 pm


Well said and I agree. Cash under the table? What happens when something is not done correctly?
Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.
Based on experience. We had a contractor take an initial deposit (never again) and not do the work. It took 1 -2 years to get it back. The magistrate required a lot of forms to be completed. We had a copy of the cashed check. They told us it was good we did not pay in cash.
No difference than having a receipt like I said.
For us having the receipt and copy of the cash check was key with the magistrate! Thank goodness for the trail. Hopefully no one experiences the same as it was an experience and not fun.

Best.
I think you are conflating having proof of payment with the payment method. I'm glad it worked out for you.

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Re: Home repair - paying cash (dollar bills)

Post by abuss368 » Thu Oct 03, 2019 8:30 pm

michaeljc70 wrote:
Thu Oct 03, 2019 8:25 pm
abuss368 wrote:
Thu Oct 03, 2019 8:23 pm
michaeljc70 wrote:
Thu Oct 03, 2019 8:06 pm
abuss368 wrote:
Thu Oct 03, 2019 7:16 pm
michaeljc70 wrote:
Thu Oct 03, 2019 6:34 pm


Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.
Based on experience. We had a contractor take an initial deposit (never again) and not do the work. It took 1 -2 years to get it back. The magistrate required a lot of forms to be completed. We had a copy of the cashed check. They told us it was good we did not pay in cash.
No difference than having a receipt like I said.
For us having the receipt and copy of the cash check was key with the magistrate! Thank goodness for the trail. Hopefully no one experiences the same as it was an experience and not fun.

Best.
I think you are conflating having proof of payment with the payment method. I'm glad it worked out for you.
Yes! No conflating. We completed all the forms and the magistrate asked for a copy of the cashed check along with receipts, quote and other docs. Took a while to put together. We were told that it was best there was a cashed check and not cash.

It was an experience.

Best.
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ddurrett896
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Re: Home repair - paying cash (dollar bills)

Post by ddurrett896 » Thu Oct 03, 2019 10:11 pm

While cash makes it easier to cheat, it’s not always the case. A lot of these guys live day to day and can’t bank roll the next job until they are paid.

As far as proof of the job being done, that’s what a contract was for. With a cleared check and no contract, there is no scope of work - good luck winning in court.

JackoC
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Re: Home repair - paying cash (dollar bills)

Post by JackoC » Fri Oct 04, 2019 8:59 am

ThriftyPhD wrote:
Thu Oct 03, 2019 6:33 pm
JackoC wrote:
Tue Oct 01, 2019 10:33 am
I generally have trouble seeing how it's my business how they fill out their income taxes. That has come up on a bunch of threads, might be regional or ethnic subcultural thing, people feeling that is somehow their business. I don't see that, but there are varying customs in a big diverse country besides varying individual opinions.
I'm not going to run around as the tax or insurance police...
But that's pretty much what you're doing when you convert a contractor's willingness to quote a discount for cash into the 'fact' that they are cheating on taxes (and that they wouldn't just do it some other way if you paid by check) and refuse the discount. Calling the authorities on such thin evidence would be even be further overboard, but still.

If somebody actually asks me to facilitate law breaking, I don't. If it's my inference or speculation, that's where it gets back to 'none of my business'.

The whole question isn't whether it's OK to cheat on taxes as in your eloquent preamble about society which I clipped for brevity. It's what is your business and what isn't. The legitimacy of the govt and taxation (which we'd have to debate somewhere else as to the details of what exact taxation) doesn't make everyone else's business my business, IMO.

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Re: Home repair - paying cash (dollar bills)

Post by beehivehave » Fri Oct 04, 2019 9:11 am

A check is fine, as it is auditable and proof in case of a dispute. The contractor avoids the processing fee.
Someone who wants cash is no doubt avoiding taxes and probably routinely violates other laws as well.

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Re: Home repair - paying cash (dollar bills)

Post by beehivehave » Fri Oct 04, 2019 9:11 am

A check is fine, as it is auditable and proof in case of a dispute. The contractor avoids the processing fee.
Someone who wants cash is no doubt avoiding taxes and probably routinely violates other laws and cuts other corners as well.

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Re: Home repair - paying cash (dollar bills)

Post by ThriftyPhD » Fri Oct 04, 2019 7:35 pm

JackoC wrote:
Fri Oct 04, 2019 8:59 am
ThriftyPhD wrote:
Thu Oct 03, 2019 6:33 pm
JackoC wrote:
Tue Oct 01, 2019 10:33 am
I generally have trouble seeing how it's my business how they fill out their income taxes. That has come up on a bunch of threads, might be regional or ethnic subcultural thing, people feeling that is somehow their business. I don't see that, but there are varying customs in a big diverse country besides varying individual opinions.
I'm not going to run around as the tax or insurance police...
But that's pretty much what you're doing when you convert a contractor's willingness to quote a discount for cash into the 'fact' that they are cheating on taxes (and that they wouldn't just do it some other way if you paid by check) and refuse the discount. Calling the authorities on such thin evidence would be even be further overboard, but still.

If somebody actually asks me to facilitate law breaking, I don't. If it's my inference or speculation, that's where it gets back to 'none of my business'.

The whole question isn't whether it's OK to cheat on taxes as in your eloquent preamble about society which I clipped for brevity. It's what is your business and what isn't. The legitimacy of the govt and taxation (which we'd have to debate somewhere else as to the details of what exact taxation) doesn't make everyone else's business my business, IMO.
I disagree. If someone is robbing homes in my neighborhood, I'm not going to run around trying to catch them. That's the job of the police. But if someone shows up at my door wearing an all black suit, a black ski mask, black gloves, and asks to borrow a pair of bolt cutters and a ladder, I'm going to say no. Me refusing to CONTRIBUTE to the crime is not the same as me policing it.

Now, you might say "But Thrifty, you're jumping to conclusions and there might be a valid reason why that person dressed as a robber needs robbing tools". Perhaps you're right, but I can't think of a valid reason and I have no interest assisting someone committing a crime.

Along the same lines, I can't see why someone would give a 10% discount for paying cash instead of accepting a check. If you can think of a valid reason, I would be interested in hearing it.

Now, I can think of reasons other than tax fraud, but I don't know that I would consider them better. Avoiding child support payments is one I've heard mentioned. Perhaps they have a judgment against them and are having their wages garnished? Perhaps if they do the job 'off the books' their insurance premium is less?

Perhaps you'll say all of those issues are none of my business. But there are two components. One, I see myself as part of society and don't want to contribute to someone breaking the law. Two, I don't want someone who is willing to commit fraud to be in my home or on my property.

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Re: Home repair - paying cash (dollar bills)

Post by Nate79 » Fri Oct 04, 2019 8:00 pm

ThriftyPhD wrote:
Fri Oct 04, 2019 7:35 pm
JackoC wrote:
Fri Oct 04, 2019 8:59 am
ThriftyPhD wrote:
Thu Oct 03, 2019 6:33 pm
JackoC wrote:
Tue Oct 01, 2019 10:33 am
I generally have trouble seeing how it's my business how they fill out their income taxes. That has come up on a bunch of threads, might be regional or ethnic subcultural thing, people feeling that is somehow their business. I don't see that, but there are varying customs in a big diverse country besides varying individual opinions.
I'm not going to run around as the tax or insurance police...
But that's pretty much what you're doing when you convert a contractor's willingness to quote a discount for cash into the 'fact' that they are cheating on taxes (and that they wouldn't just do it some other way if you paid by check) and refuse the discount. Calling the authorities on such thin evidence would be even be further overboard, but still.

If somebody actually asks me to facilitate law breaking, I don't. If it's my inference or speculation, that's where it gets back to 'none of my business'.

The whole question isn't whether it's OK to cheat on taxes as in your eloquent preamble about society which I clipped for brevity. It's what is your business and what isn't. The legitimacy of the govt and taxation (which we'd have to debate somewhere else as to the details of what exact taxation) doesn't make everyone else's business my business, IMO.
I disagree. If someone is robbing homes in my neighborhood, I'm not going to run around trying to catch them. That's the job of the police. But if someone shows up at my door wearing an all black suit, a black ski mask, black gloves, and asks to borrow a pair of bolt cutters and a ladder, I'm going to say no. Me refusing to CONTRIBUTE to the crime is not the same as me policing it.

Now, you might say "But Thrifty, you're jumping to conclusions and there might be a valid reason why that person dressed as a robber needs robbing tools". Perhaps you're right, but I can't think of a valid reason and I have no interest assisting someone committing a crime.

Along the same lines, I can't see why someone would give a 10% discount for paying cash instead of accepting a check. If you can think of a valid reason, I would be interested in hearing it.

Now, I can think of reasons other than tax fraud, but I don't know that I would consider them better. Avoiding child support payments is one I've heard mentioned. Perhaps they have a judgment against them and are having their wages garnished? Perhaps if they do the job 'off the books' their insurance premium is less?

Perhaps you'll say all of those issues are none of my business. But there are two components. One, I see myself as part of society and don't want to contribute to someone breaking the law. Two, I don't want someone who is willing to commit fraud to be in my home or on my property.
Bad checks. People write bad checks all the time and it's a pain to deal with. When you get cash you know you got paid and don't need to try and collect on a bad check.

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Re: Home repair - paying cash (dollar bills)

Post by drawpoker » Sat Oct 05, 2019 11:53 am

Many posters are assuming that home improvement contractors who discount for cash are cheating on their taxes. Maybe some, but not all.

I recently had $2,200 worth of new privacy fencing put up at my townhouse for cash. The fence contractor, who I had used previously on the same cash basis, has his own good reasons (which he fully explains to anyone who asks) for preferring cash jobs.

He wouldn't make a very smart tax evader, anyway. All of the contracts I have signed with him plainly indicate both the deposit and the balance are to be paid in cash only no checks or credit cards accepted.

As Mr. Rumples pointed out, many states have the state guaranty fund for victims of licensed home improvement contractors. The key is to be sure the contractor is currently licensed, our state (MD) can take no legal action and reimburse victims against any companies or solos who are not.

7eight9
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Re: Home repair - paying cash (dollar bills)

Post by 7eight9 » Sat Oct 05, 2019 12:06 pm

I can certainly understand why a contractor would prefer cash to alternative forms of payment. Credit cards can be charged back. Checks can bounce. The latter is such a problem that our District Attorney's office has a Bad Check Unit.

Link to DA's Bad Check Unit --- http://www.clarkcountynv.gov/district-a ... fault.aspx

What is especially nice is that (t)he services of the Clark County District Attorney’s office in obtaining restitution and prosecuting bad checks are free to you, the victim. The issuers of bad checks, not you, will pay any administrative costs, as provided by Nevada law.
I guess it all could be much worse. | They could be warming up my hearse.

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Re: Home repair - paying cash (dollar bills)

Post by ResearchMed » Sat Oct 05, 2019 12:24 pm

drawpoker wrote:
Sat Oct 05, 2019 11:53 am
Many posters are assuming that home improvement contractors who discount for cash are cheating on their taxes. Maybe some, but not all.

I recently had $2,200 worth of new privacy fencing put up at my townhouse for cash. The fence contractor, who I had used previously on the same cash basis, has his own good reasons (which he fully explains to anyone who asks) for preferring cash jobs.

He wouldn't make a very smart tax evader, anyway. All of the contracts I have signed with him plainly indicate both the deposit and the balance are to be paid in cash only no checks or credit cards accepted.

As Mr. Rumples pointed out, many states have the state guaranty fund for victims of licensed home improvement contractors. The key is to be sure the contractor is currently licensed, our state (MD) can take no legal action and reimburse victims against any companies or solos who are not.
Why wouldn't that contractor make a smart tax evader? Presumably not because of the signed contract.
How would the IRS ever know that such contracts existed, IF such a person wanted to evade taxes?

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MrJones
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Re: Home repair - paying cash (dollar bills)

Post by MrJones » Sat Oct 05, 2019 12:56 pm

michaeljc70 wrote:
Thu Oct 03, 2019 6:34 pm
abuss368 wrote:
Mon Sep 30, 2019 5:08 pm
Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
Well said and I agree. Cash under the table? What happens when something is not done correctly?
Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.
+1. It's quite a tall accusation to make, that anyone preferring cash is cheating on their taxes and is an overall cheat in life, and that argument involves several huge leaps, right?

People used cash exclusively for centuries. There are many reasons to not prefer credit cards or checks. Fees, latencies, chance of bouncing, etc. For example, a lot of Craigslist sellers still seem to prefer cash, while none of these transactions involve income taxes.

A receipt makes up for almost any proof that may be required.

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Re: Home repair - paying cash (dollar bills)

Post by drawpoker » Sat Oct 05, 2019 12:57 pm

ResearchMed wrote:
Sat Oct 05, 2019 12:24 pm
Why wouldn't that contractor make a smart tax evader? Presumably not because of the signed contract.
How would the IRS ever know that such contracts existed, IF such a person wanted to evade taxes?
If the IRS (or state) begins an inquiry because they suspect tax evasion (under-reporting income) they are going to be looking at all his books. Everything. If my fencer is consciously reporting income from all jobs as I believe he does he is going to be eager to show copies of all his work orders in any audit.

If he plans on under-reporting business income he not going to be signing any contracts reflecting he is taking in cash instead of checks for that job.

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Re: Home repair - paying cash (dollar bills)

Post by Cosmic Pony » Sat Oct 05, 2019 1:04 pm

We paid $10,000 cash for cabinet work some years ago and then ended up in court with the contractor. We won, but I would never pay cash again as there was no proof of most of the payment. The work was so deficient that the judge sided with us. Side story: The night we withdrew the cash from the bank and stashed it in a place we thought was safe in our home, just to get to the next morning when it would be paid, our house caught fire. We got the family and most pets out okay (lost a hamster) but then stood there sweating bullets on the front lawn. Luckily the first responder was someone we knew and he escorted us into the burning house to retrieve the $10,000. This was a huge violation and a huge favor. Once your house catches fire it is considered like a crime scene till the insurance company goes through. DON"T TO IT!

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Re: Home repair - paying cash (dollar bills)

Post by michaeljc70 » Sat Oct 05, 2019 1:05 pm

MrJones wrote:
Sat Oct 05, 2019 12:56 pm
michaeljc70 wrote:
Thu Oct 03, 2019 6:34 pm
abuss368 wrote:
Mon Sep 30, 2019 5:08 pm
Breezy wrote:
Mon Sep 30, 2019 3:12 pm
I wouldn't hire the guy at all because the reason he's doing it is to cheat & not pay taxes on his earnings. Which makes him a cheat, which means you might get cheated too, someway & somehow.
Well said and I agree. Cash under the table? What happens when something is not done correctly?
Or...he doesn't want to pay a 2-3% credit card fee and risk a chargeback (which is not always legit). I think you are making a big assumption. People pay cash everywhere, everyday. Granted, usually not $6k. That doesn't mean the business/contractor/employee wants to evade taxes. When I leave a tip to the waiter in cash I don't worry about whether they are evading taxes.

If you pay cash, get a receipt. If something is done wrong I don't see how a check that can be cashed 5 minutes after you give it to him will solve anything.
+1. It's quite a tall accusation to make, that anyone preferring cash is cheating on their taxes and is an overall cheat in life, and that argument involves several huge leaps, right?

People used cash exclusively for centuries. There are many reasons to not prefer credit cards or checks. Fees, latencies, chance of bouncing, etc. For example, a lot of Craigslist sellers still seem to prefer cash, while none of these transactions involve income taxes.

A receipt makes up for almost any proof that may be required.
I've also noticed that certain cultures/immigrants use/prefer cash way more than the typical American.

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