(If this thread is a problem feel free to close or delete, though it's partly tongue in cheek. Let's have some fun with this.)
So I've got my ERE plan and I'm relatively satisfied with my 9 year timeframe, but occasionally I'll read others' posts and journals here and get a bout of jealousy over how fast they're reaching FI. On the other hand, I'm lazy and set in my ways and have already cut my expenses pretty close to the bone without making huge life changes like selling/renting out my house. I wouldn't trade my secure do-nothing government day job for any other form of wage slavery, regardless of the pay. And while I could get a legitimate part-time job, let's face it, once you hit a certain level of income, struggling too hard to increase (taxable) income just doesn't make much sense.
So, what are some ideas for earning tax-free or under-the-table wages? Legality not necessarily an issue--in fact, even discussing this is probably illegal for all I know. (My name and IP address are being added to some database in the Infernal Revenue System as we speak.)
So hit me. What've you got? I'm not badass enough to sell or manufacture drugs. How about selling my body as an internet cam-whore? Does Paypal report transactions to the IRS?
Selling stuff on Craigslist that you creatively sourced. Garage sales, black Friday or other sale deals, maybe refurbished laptops (buy broken, fix, resell?) eBay and PayPal will report you to the IRS over a certain threshold. Make your own x and sell on CL...
I would never cheat on my taxes. It is not worth it. Richard Branson and Felix Dennis wrote autobiographies in which they describe being in jail 1 night for breaking the tax law. They are both self-made men who reached the list of top ten richest people in England. Both said the same: do not cheat on your taxes. Without your freedom, you have nothing.
Any idea what the threshold on ebay/paypal is? Even if it's like 1000 bucks that's not bad for a little extra spending money. Better than working 1000 bucks worth to actually earn 600...
@RealPerson: If a tree falls in the woods and no one hears it, does it make a sound?
If income is earned and no one reports it, is it cheating?
I find it unlikely that unreported income would cause a problem and really unlikely that all-cash income of the craigslist/garage sale type would.
Cash in hand ?? Think ice cream vans and market stalls.
Here you can have a lodger and rent a room tax free up to a certain amount (£5000 I think) - maybe check if there's something similar where you are.
You could consider doing a little gambling. In the UK at least, profits aren't taxable, I assume the same is true in the US. I have been experimenting with it myself using a small pot. So far I am up (quite a lot, considering the small pot I started with). If I can continue making a profit, I will keep at it. If I lose my initial pot, I will just call a halt to the experiment.
Another thing I have started doing is selling things. I have $1,000's worth of stuff that is just sitting in crates or boxes that I haven't even looked at in years. I have started photographing and catologuing the most useless possessions that I have and already I am surprised at just how much money I have taken in. The exercise won't make me rich, but if I can get 2-3 months worth of living expenses, then it's worthwhile.
Craigslist/local classifieds > eBay by the way. Between paypal and ebay fees, you're losing a fairly significant chunk of the selling price. Also, packaging stuff up to post is a pain as you nearly always end up under-estimating postage costs and you have to travel to the post office to send stuff off. With CL, at least buyers come to your door.
Find some sort of trinket. My dad makes keychains and made a little stand at the local gas station and they sell them for him.
I was thinking of getting a 3D printer. Cost like 2K to get one, but once you have one you can make whatever you want. And sell it for cash.
Also there's the usual plasma donor thing. I'm pretty sure they keep that anonymous.
I know a few people that actually make all their side money under the table by signing up for surveys, testing drugs, donating things to science. It just takes a lot of time to research and find out who needs what and how much it pays.
@SW I think I read in one of your posts that you're up in MD somewhere right? Think Amish.. My grandfather quit his job to work for them. They can't drive cars, but need to go places sometimes. So he'd drive them around. They don't pay taxes so they don't report you either. He made a LOT of money off of them.
OH and while we're on the topic of quasi legal money making..
The Amish also are looking for men to impregnate their women. It pays 500/woman that you impregnate. This was in the papers, you can look it up. It hit all of our local papers. And NO I didn't do it, they don't take gingers. lol.
@S_W - I don't think you owe taxes when selling your old stuff on CL/Ebay. After all, you are almost certainly selling things at a loss compared to what you paid for them.
Things are in principle a little different when selling on CL/Ebay becomes your business. You buy used stuff and then sell it for a profit. There is also a real difference between CL and Ebay. Local transactions paid with cash through CL are virtually untraceable. Payment of Ebay leaves a digital track and through seller reviews etc it would be easy for the IRS to figure out if you are running a business on Ebay. I don't know if they are checking this out, but it would not surprise me. Heck, the IRS may well require Ebay to provide them with reports of who is selling how much.
A very profitable side business would be prostitution. Not many customers pay by check or c.c. and very few want a receipt I'm guessing. Just getting creative here. ERE in 4 weeks!
Most any cash transactions that are not done as a business.
Buying and selling things (as mentioned). Craigslist might work well for some types.
Doing work that you get paid cash (Handiman, some construction/contracting type work, landscaping/lawn care/snow removal, bartending, housesitting)
Strange randoms stuff: hunting/trapping to sell furs, fish, etc.
Here are notes I wrote from a quick read through "Earning Money without a job" by Jay Conrad Levinson. Many of them are just small-scale jobs you can do without being part of or having a business.
NO CAPITAL:
- baby sit
- wash a window
- houe sitting
- collect stuff to sell from beaches
- boat help (wash, paint, clean, etc)
- Smoke fish (near peir/warf, sell to locals)
- Raise and sell worms
- Sell at flea market
- Teach something
- Garage sale
- temp work
- Sell a house for someone (?)
- Write a column / blog
- Market cable (get deal with local place)
- Sell sanwiches/food (bar closing time - sport events, etc.)
- Tend plants
- give massages
- tutor children
- paint homes
- personal assistant
- nude modeling
- car washing
- deliver lunches to businesses (set up plan with stores/restaurants and businesses, middleman/deliver)
- Clean basements / help people declutter
- retrieve golf balls from course ponds
- Find and sell gold, silver
- help people move
- simple car maintenance (maybe overnight - so they don't go without car)
two thoughts here:
1) seems any contract work I do for clients, they don't have to report me to the IRS until I've made $600. So, any kind of contracting/consulting work (even repair work) should work - as long as it's not over $600. Now, if that's ALL you do, I think you have to report that as self-employment income.
which brings me to my next topic....
2) So, I've got like 4 or 5 little businesses. Ok, so they're not all little anymore. In fact the "first one" I did is now the smallest - because the others are producing so much more.
I'm throwing together another biz right now - an online web presence for information on our community. It'll have some advertising with it. Do I need to report that income too? At what point does the IRS give up on tracking my seven little businesses?
joe bob DBA Joe bob's biz #1
I'm not really sure on this, but my accountant says this is kind of a grey area on what you have to report. I have 1 employee right now that only works part time and makes just a few hundred a week. I don't have to report that. BUT, I also have people I pay as contractors. Apparently the IRS code says that regardless of how much a 1099 worker for you makes, you need to report that you pay it. Just don't have to put a name along with it. I know it sounds kind of sketchy, but I've seen a few businesses running like this. Mine however is not. I report each and every dime paid out maily due to my accountant says that the IRS is getting really hard up for money right now and are handing out all kinds of fines. Said they hit one of their other clients up for a 50 dollar fine for impropertly labeling an employee as a 1099 worker. I don't claim to understand the tax code, so don't take my words for that. I'm sure with all the smart people on here that someone is bound to be a bean counter that can answer this for certain.
Check out investment types that are tax deferred or tax exempt. Certainly in Australia, some income from REITS falls into this category. I get about $2000 in tax free / tax deferred distributions each year this way.
Zeran, have you read any of the (fairly) recent articles in the food world on what they are calling the up and coming trend of restauranteurs? The younger chefs are having trouble getting loans. So what they are doing is cooking meals and then they sell tickets for people to come to their homes and eat. It's obviously a limited offer because nobody wants to sit on your couch. So however many seats are at your table/bar that's how many tickets they sell. They keep it really exclusive too. One couple I read was like the originators of the idea and they give their tickets out for free to different people each week. But it's taking on a whole new life of it's own.
You could try something like this if cooking is a great passion of yours. I've thought about it, but I never got into it far enough to think about insurance or if someone gets sick or really any number of bad things that can happen to someone on your property or while eating your food. I think the catch-all way around it might be to say it's a donation for cooking supplies instead of actually selling the tickets. But If you really wanted to do something like this I'm sure it's well worth looking into.
