I used to be a regularly gigging musician, then my son was born. My son is grown up now, and I have been offered a job in a 60’s and 70’s soul/r&b band that plays mostly private parties but some clubs. The better paying jobs will be 1090’d but the lighter paying ones will be cash under the table. When I did this 20+ years ago, most monies were under the table. In Catholic doctrine, am I obligated to report that money and pay taxes on it? If the answer is “yes”, and I suspect that it is, I am inclined to just donate 100% of the monies from the lighter paying gigs that are not 1090’d. Anyways, I’m hoping for a full blown discussion on the ethics of this sort of thing.
I think you already know the answer to this question.
Donating to a good charity would be the best solution. Certainly, a Catholic cannot advise anyone to dodge income taxes, as tempting as that might be.
I don’t know what tax bracket you are in, but it could be that you wouldn’t have to pay much tax on it, so why not declare it (assuming the law requires it) and ease your conscience?
Under the law, even if you “just donate 100% of the monies from the lighter paying gigs,” you are still required to include it in your gross income. If you donate it to a qualified charity you can deduct it on Schedule A. (Which may or may not be helpful to you, depending on your particular situation.)
I can’t speak with any authority about how Catholic doctrine applies to the Internal Revenue Code, but I seem to remember something about rendering unto Caesar the things that are Caesar’s.
I don’t know what country you live in but it is always a good idea to report at least most of the money that you earn. For example if you are given anything above the agreed cost of the performance in theory that part you wouldn’t have to declare because it could seen as a tips or the equivalent of it. Otherwise, if you don’t declare it and tax revenue services finds out, they could decide to audit you and require that you pay X amount back in taxes. Let’s face it, that would cost you more money in the long run.
For simplicity sake, declare it and keep the revenue services off your back. Sometimes common sense out rules church doctrine. If you want to be technical, when it comes to paying tithes and offering, generally the amount suggested is 10% therefore it is something to consider when looking at your financial situation.
Depending on your tax laws, you may still have to report it and pay taxes. In Canada, such “under the table” payments are fine (to the best of my knowledge) but are still considered taxable income, just as tips are. Best bet would be to consult a tax professional on the matter. I would not want to report any income if it’s not required by law, but I also wouldn’t want to not report it if it is.
It’s the honesty tax. You and 4 other musicians playing such gigs are actually paying taxes on it. For darn sure the drugged out metal-head who constantly vote for major government handouts aren’t reporting theirs. Yet another way society is stacked against the honest.