Me: Community member asks me being a college student to help with his Asbestos business over past summer

>me: Community member asks me being a college student to help with his Asbestos business over past summer.
>I accept and we agree on $12 hour (keep in mind I got paid for driving and days for just doing random work around his farm.
>I kept track of my own hours and when I gave them to him he just deposited cash into my bank acc
>I asked him am I just getting paid tax or are you going to be sending me a W2
>He said I don't technically work for him but am a partner of his company.
>Me being a naive 20 year old just trusted that it works out to me getting the 12 an hour and he'll take care of tax stuff.
>Come tax season Im back in school and text him if Ill get any form with info
>He responds ill get a K-1 by Feb 15
>I do some research and read some concerning stories with Partnerships and Trusts
>I text him a couple days later asking what Im going to be expected to pay taxes on as I need to know because I have tuition bills coming up
>He Hasn't responded yet after a day
>How bad can this situation be /b??? :/
>Keep in mind I never signed any documents like you typically would prior to working. I used signature for things like getting my license and buying certain things= could've he forged?

im not an americuck so don't know. how hight are your bills and whats your cashflow?

r/personalfinance would be the best place to ask

If he didnt file them then dont pay them. The IRS doesnt care about your 12$ an hour job. They want to get salaried employees who fuck up their taxes

spotted the redditor

jesus shit, you were working under the table for months and didnt even question it.you actually can prob get away with not reporting it as income

This. If nobody knows, then there's no problem. Noone's gonna bite you in the ass for 12$/hour for a part-time job.

Did you give him your SSN? If not don't worry about it, the IRS won't associate it with you.

K1s are used for reporting distributions in a partnership. It doesn't automatically create one. If you were a true partner there is some legal requirements. He would have had to inform you of the distribution of assets and liabilities, as wells as some other things. Also in a partnership you'd be entitled to a share of any income he made even when you went back to school. He also would be required to buy you out if you left.

I agree, Im I told him once that if I was just getting cash that I was cool with it. But he responded with this partner thing and stuff about 401k and deductibles and I was just like well I trust you know what you're doing. My question is, could he somehow be cheating the system to make me responsible for a % of company income?

You would of had to sign a contract with him stating your % in the partnership. Basically someone can't just point at you and say "he's my partner." If you were his partner you would be entitled to a lot more than just the tax bill.

Agree, so what were trying to figure out is why he gave me that line of bs when he knew I was okay with being cash...? and why now he says Ill be getting a K1

Who knows why he said it. He can give you K1s all day long, it won't mean anything. If he has your SSN you might have a couple headaches, but you won't be on the line for partnership liability. How old is he? He probably doesn't understand the tax law.

He's like 50 but he has an MBA. I spoke with another buddy that worked with him in the past and said the owner (the guy were talking about) is an LLC and just gives us a small % shares like

I wouldn't worry about it, unless he gave you a large distribution. Basically he can't say he gave you more than what he already paid. He also needs your SSN to report it. You may have to pay some taxes, but it shouldn't be a huge amount.

Thanks for all the responses everyone!!! Ill wait to see what the K1 says and talk to a CPA if I need to.

You arent going to file a 1040-EZ

first you have to find ALL of your expenses
gas station
work shoes
sunglasses
equipment
car maintanence
literally anything that you used for work? wore a pair of underwear?? deduction


if you have a banking app this should be sufficient.

File whatever form is necessary for a partnership. im almost sure he's under an LLC unless being a farm owner makes in X state comes with different requirements.

If it's an LLC. you should set up your own. costs $50 and takes minutes. Then you actually have options on delaying your taxes and other things.

You are your own CEO, lawyer, and accountant in this work relationship. if you dont want to do all this work then find another job and eat the loss. you can probably work a lot of this situation to your advantage

>not an accountant
>not a lawyer

He is an LLC. I contacted a buddy that worked for him in the past. I think what he is doing is using my "work" and saying its equivalent to the shares I hold? But again I never signed anything and I think he is playing on my lack of knowledge.

And this would mean Id have to have all the receipts too correct? Which I don't because at the time I had know idea what it was. Maybe Id be best to wait and see what he claims I own on the K1 and take it to a CPA and ask for their opinion.

dont be too concerned with the "letter of the law"

functionally. you are a contractor worker for his LLC. It's best to act as a contractor as your own LLC. because you have access to credit and other funds to fuel your business which in this case is helping to support a farmer.

understand that your income earnings bonuses tips are subject to your own accounting. quikbooks will get you set up for the future but as far as whats occured in the past there are many ways to prove your spendings relevant to your business which is your contract with farmer guy.

your bank should send you statements onthe month. this is hard evidence to support any deduction. also you can fill in the spaces on the tax forms buy looking through your purchases on your bank statements and approximating the total expense (oh grocery store is not a work expense but the shell gas station is).

You dont own shit OP. you dont own anything in that company. the owner would have to add you as a manager on his LLC in order to appropriate you shares in his company. if he has a some clause that allows him to assign shares with a non manager position in the LLC then you should verify this by actually seeing his operation agreement for his LLC.

>not a lower
>not an accountant

What gave it away, Sherlock? Two can play at this game.
>Spotted the fag