MmeGigs
Posts: 706
Joined: 1/26/2008 Status: offline
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quote:
ORIGINAL: servantforuse If room and board are a payment, they would also be income for those recieving room and board. That income would be taxed. The income tax would be just the beginning. There are also the employment/self-employed taxes to be paid (FICA and medicare). Those are about 14%. Who pays those depends on whether the person is an employee or a contractor, but they do have to be paid. If it's determined that the slave is an employee, one could get dinged for not filing and remitting payroll deductions. If slave is determined to be a contractor, one could get dinged for not filing a 1099 in a timely manner (by Jan 31). All in all, this is a bad time for wage-earners to be fudging on taxes. The IRS has been cracking down on this group for the last few years, looking carefully at taxable benefits (for example, employer-provided cell phones/blackberries/internet access) and at deductions. Were I to be fudging in some area of my return, I'd want to be sure that I could make some kind of argument for its legitimacy and that the rest of my return was absolutely above reproach. I'd want to be prepared for someone to ask questions about the fudged bits, and for them to disallow my deduction and send me a bill for additional taxes. The IRS may be less of a concern than one's state dept. of revenue. Many states piggyback on the 1040. It's been my experience that the state is a lot more picky about things, and a lot more likely to follow up on them and to get other departments involved. In the OP's scenario, that could get pretty ugly depending on what one's state employment laws and political climate are like. To sum up, I would recommend that the OP not attempt to deduct these expenses.
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