Keeping that much liquidity in your home is a huge liability. House fires, break ins, and hold ups happen more frequently than people like to think. Plus nowadays it doesn’t take much effort for the government to figure out if you’re avoiding taxation, especially if you’re using an electronic service like PayPal.
I can guarantee that the people who are avoiding the most taxation aren’t doing so by keeping cash stuffed in a safe. Properly knowing how to register and operate an LLC is basically the equivalent of a get out of jail free card in America.
I’ll just say, this… hypothetical person is not earning this money online. The lockbox is fire-safe and their home has extensive security. With the business they’re doing, their government is not finding out. If so, there are much, much bigger worries than taxation.
It’s only a couple hundred grand, anyway.
Quick edit: for the average person though, I agree with you.
Even in your particular hypothetical, it’s still not the best way to minimize liability or culpability.
The lockbox is fire-safe
Fire safes rarely survive actual house fires, they’re typically only rated to last 30min to an hour of exposure. In the event of an actual fire, it’s pretty doubtful that you’d be able to even find the safe afterwards. If it is recoverable, it’s going to be found by investigators, who will probably question why you have so much cash.
their home has extensive security.
Pretty much all security is theater unless it’s an armed human, and I doubt you’re going to have an armed guard available 24/7.
With the business they’re doing, their government is not finding out. If so, there are much, much bigger worries than taxation.
Right, but do you know how many fraudulent organizations get busted because of tax evasion? The goal is to separate the money (evidence) from you as much as possible. Having it sit in a secured safe that only you have access is evidence makes you culpable to the crime.
the average person though, I agree with you.
I would say anything that applies to the average person applies even moreso to a person engaged in less than legal businesses.
It’s like businesses who deal with cash so they can avoid credit card fees. Cash handling has its own costs, including risk of theft and loss. I guess there’s also the tax evasion angle but they’re generally not happy when that catches up with them.
Keeping that much liquidity in your home is a huge liability. House fires, break ins, and hold ups happen more frequently than people like to think. Plus nowadays it doesn’t take much effort for the government to figure out if you’re avoiding taxation, especially if you’re using an electronic service like PayPal.
I can guarantee that the people who are avoiding the most taxation aren’t doing so by keeping cash stuffed in a safe. Properly knowing how to register and operate an LLC is basically the equivalent of a get out of jail free card in America.
I’ll just say, this… hypothetical person is not earning this money online. The lockbox is fire-safe and their home has extensive security. With the business they’re doing, their government is not finding out. If so, there are much, much bigger worries than taxation.
It’s only a couple hundred grand, anyway.
Quick edit: for the average person though, I agree with you.
Even in your particular hypothetical, it’s still not the best way to minimize liability or culpability.
Fire safes rarely survive actual house fires, they’re typically only rated to last 30min to an hour of exposure. In the event of an actual fire, it’s pretty doubtful that you’d be able to even find the safe afterwards. If it is recoverable, it’s going to be found by investigators, who will probably question why you have so much cash.
Pretty much all security is theater unless it’s an armed human, and I doubt you’re going to have an armed guard available 24/7.
Right, but do you know how many fraudulent organizations get busted because of tax evasion? The goal is to separate the money (evidence) from you as much as possible. Having it sit in a secured safe that only you have access is evidence makes you culpable to the crime.
I would say anything that applies to the average person applies even moreso to a person engaged in less than legal businesses.
It’s like businesses who deal with cash so they can avoid credit card fees. Cash handling has its own costs, including risk of theft and loss. I guess there’s also the tax evasion angle but they’re generally not happy when that catches up with them.