It doesn’t happen very often, but I’m sure it’s happened to each of us at least once: while taking a payment at the door, someone pays you in cash. And a thought that may run through your mind is, “I don’t have to report this. There’s no trail, no evidence, and then I don’t have to pay taxes on it later.” Tempting though that potential break may be, whatever else you may want to do with that money, don’t do it.
This issue really just comes down to honesty. I know there’s all kinds of things I’d rather be doing with the money I earn than paying taxes. Even when I set the money aside specifically for that purpose, I don’t want to do it. But the fact of the matter is, the reputation of your company is not worth the odd payment here or there that you didn’t report. Transparency in your business is better than that new car, or that dream vacation. If nothing else, being honest in this area will at least help you sleep better at night. No matter how ridiculous you may feel your taxes are, lying on your taxes will hang over your head and never let you rest.
When I’m paid in cash, I like to fan the bills out and take a picture. This picture can then be attached directly to my workfile, and I am able to keep track of the payment that way. If anyone asks, I have a “receipt” of the transaction. Even if reporting cash payments is a hassle, even if you’d rather do anything else with your money than pay taxes, do the honest thing. Protect your integrity and the integrity of your business. You’ll be glad you did.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: