DBA mandated by employer

[raedar]

What is the name of your state (only U.S. law)? Texas

Hey guys. Query relating to DBAs and employment (hope this is the right section - if not I apologize!)

I work for a very small local retail business, full-time and beyond (normally 44-48 hours per week at a steady rate, plus tips and minor commission). I've been getting paid cash off the books for the two-three years I've been here (I know, I know) and recently my boss asked that I get a DBA to operate in the state under another name (this way they could pay me in checks as a contractor without suffering consequences or having liability, I presume). I was forced to create a bank account in the name of my new DBA as I would have been otherwise unable to deposit any checks.

My question is this: what are the long-term repercussions regarding DBAs? I have only a very basic knowledge of taxes in general (all the companies before this one did mine for me and I just filed at the end of the year). I was under the impression that I had to file taxes "quarterly" with a DBA. I would like to continue working here but if it's going to jeopardize me legally I would prefer not to. Are there any benefits at all associated with my having a DBA?

Thanks everyone.What is the name of your state (only U.S. law)?

 

[davew128]

What makes you think ANYTHING has changed with the DBA? Oh, wait, you didn't report the income before the DBA.....

 

[FlyingRon]

Both you and your boss are intentionally breaking the law.

The boss should not be paying you under the table, and he should not be trying to treat you as an independent contractor. Further, there's nothing special about a DBA that makes it any more or less legitimate to pay you as a contractor. All a DBA (which is also called a fictitious name filing) does is allow you to operate a business under a different name than the legal entity (either your name if you are an sole proprietor or a corporation name).

As an independent contractor, with or without the DBA, you are supposed to be filing quarterly estimated tax payments. You report the income on the appropriate schedules (C and SE) at the end of the year.

You can also file an SS-8 which asks the IRS to determine that you are indeed an employee. This will allow you to not pay the part of your self employment tax obligation that should have been paid by your employer.