The 'discount for cash' chat I heard at a hardware store got me thinking

I was at Ace Hardware yesterday buying ant bait and overheard two guys talking pest control. One was bragging to the other that he knocks 20% off the bill if customers pay cash under the table. I get the appeal, no credit card fees and all. But man, that's how you end up with no paper trail and a headache come tax time or if a customer decides to sue. I had a buddy do that for 18 months and got slammed with a big fine and back taxes. Has anyone else tried the cash discount route and lived to tell about it?

3 comments

3 Comments

charlie19817d ago

Tbh that 20% off sounds great until the tax man comes knocking hard.

matthewking16d ago

Honestly I get where you're coming from but I look at it differently. That 20% off still puts more money in your pocket before taxes even if the government takes their cut after.

mason.drew15d ago

Holy cow, 20% off for cash seems like you're practically giving away your profit margin before you even start... @matthewking is right that you might pocket more short term, but that math gets real ugly when the IRS decides to recalculate everything. I've seen people get burned way worse than they saved trying that kind of shortcut.