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Technically yes. As long as you don't leave any sort of paper trail on the money, you should be fine. If you have shopper loyalty cards that give you points based on how much you spend, though, and suddenly you start dropping $$$ more a year than you were previously on the same pay, or if your social media posts indicate a lifestyle well above your means, it could be a red flag, even if you pay for everything in 100% in cash and never make a single deposit into a bank. If the IRS sees you enjoying a 70k+ lifestyle on ~25k/year (and it adds up ***fast***), they might get a little curious. If they see you're working at a strip club (you give them your info when you audition, in theory) and can't clearly "prove" how much you actually make, they're free to make their best guess and have you pay back taxes on whatever amount they decide you made.
As long as you're careful, though, it is totally possible. At the very least, if absolutely nothing else, you should claim whatever you have a paper trail for.
It's also possible for the IRS to let you get away with it for a while and then when they audit you, make you pay back taxes on all the money you owe plus interest. Just because a year or few go by with no incidents doesn't mean there won't be something that sends up a red flag for them later on that'll have them ding you quite a bit for.
Just to let you know, if they catch you they can assess a penalty of up to 100% in addition to interest and fees. If you're doing it for 6 months they may not notice, but you won't get away with it for years.
So it would be best to claim everything then?
Many have tried to cheat the IRS. It seldom works. Remember, the IRS was the one who put Al Capone in prison for not paying his taxes.Nothing stops the IRS from collecting including bankruptcy. They will seize your bank accounts, sell your house, and anything they can get their hands on. Just pay your taxes like everyone else does.
There's a few of these cases that pop up in the news every year, and probably hundreds of others that go unreported. Basically, dodging your taxes is bad, mmkay?
The main thing is that your "secret dirty money" must always remain completely off the books. The time and hassle to launder it means that you might as well just pay the taxes. Generally laundering is for illegal earnings, which is not the case here.
The issue with not having a major portion of your income as legitimized is that you'll always need to be doing cash deals for everything. Kiss owning real estate goodbye, do not finance or register a new car, and don't keep your money in a bank. You'll never be able to prove your income regardless, as any serious income verification looks at sometimes the past 2-3 years of tax returns.
Some people can live off the grid like that, but sooner or later you're going to say to yourself "I'm making $100,000 a year, I should have nice things." - That's when its going to bite you in the ass.
You can get away with everything as long as you know how to deal with the law.
Technically yeah but I don't know why you wouldn't just cash it. When you put it in the bank you can start putting the money towards investments and buying a better home instead of having 100k parked under your mattress and barely spendable just because you don't want to pay a certain percentage of taxes. Having a higher reported income also qualifies you for better health insurance.