They think we all have a "cookie jar". The LAST one I am going to try to diddle is the tax man. Ain't worth it.My thought would be they are going to 'hide' that cash business because a 10% discount is way more than the cc processing fee. We get the occasional guest who asks about a cash discount. I know they are talking bigger dollars than it is worth to me because they are thinking I'm going to 'hide' that money from the tax man. So, instead of giving the money to the tax man I'm supposed to give it to the guest?.
Cash is not always that great. With all the counterfit money that goes around I am not sure I want it. If you take counterfit money to the bank they keep it and you lose. Not worth it..
Not only that, but you also have to deal with the hassle to go and deposit it in the bank.sandynn said:Cash is not always that great. With all the counterfit money that goes around I am not sure I want it. If you take counterfit money to the bank they keep it and you lose. Not worth it.
Cash is not undeclared income. Cash guests are recorded and handled the same way (and deposited into the bank the same way) as any other payment type. In addition to that, lodging taxes are a pass-through to the cost, and do not come out of our pockets.Cash is undeclared income....
CC payments are deposited into a bank account....a record of the transaction....declared income.
With the CC transaction there is a % fee taken by the CC company...Generaly 2.5 - 3.5% of the transaction.........Granted.....not much reason there to be offering a 10% discount of the nightly room rate. Perhaps this is an option rather than providing a "third night free" or some other 50% discount of a room night for multiple night stays?
Most discount offerings are not combined
Now.....most are reading this as a 10% discount on the room rate.
What we don't know is....lodging tax....The lodging tax is variable state to state. It is generaly 6 - 10+ %
Depending on how the discount is handled.......If it is stated on the "total" nights stay......that would be including the lodging tax........add the lodging tax to the CC transaction fee and where are you?
Additionaly with cash.....as stated at the top.....undeclared income.
Not reported on income tax. With most businesses, liability insurance is determined by the gross annual income. Showing a lower gross annual income will lower the liability insurance annual cost.
So......think about the CC transaction.....lodging/sales tax is added on...Transaction fee is deducted from that total....Income tax, insurance premiums.
Cash.....no record of the transaction.......unless it is a business traveler.
agreed with the lodging tax....
Business owner benefits on not having the CC transaction fee.
As for the declared income.......what ever you want to do.
I would not mention on a public forum if I didn't declare cash income....One Day said:agreed with the lodging tax....
Business owner benefits on not having the CC transaction fee.
As for the declared income.......what ever you want to do
The probelm with undeclared income in a business this small is that you can't sell it down the road saying it makes $x when you are only declaring $x-y. We saw a couple of those wink-wink businesses when we were looking and we based our purchase price on what they declared for taxes not what they told us they made. I guess you could start doing only cc transactions once you decide to sell and suddenly have a very good year.Cash is undeclared income....
CC payments are deposited into a bank account....a record of the transaction....declared income.
With the CC transaction there is a % fee taken by the CC company...Generaly 2.5 - 3.5% of the transaction.........Granted.....not much reason there to be offering a 10% discount of the nightly room rate. Perhaps this is an option rather than providing a "third night free" or some other 50% discount of a room night for multiple night stays?
Most discount offerings are not combined
Now.....most are reading this as a 10% discount on the room rate.
What we don't know is....lodging tax....The lodging tax is variable state to state. It is generaly 6 - 10+ %
Depending on how the discount is handled.......If it is stated on the "total" nights stay......that would be including the lodging tax........add the lodging tax to the CC transaction fee and where are you?
Additionaly with cash.....as stated at the top.....undeclared income.
Not reported on income tax. With most businesses, liability insurance is determined by the gross annual income. Showing a lower gross annual income will lower the liability insurance annual cost.
So......think about the CC transaction.....lodging/sales tax is added on...Transaction fee is deducted from that total....Income tax, insurance premiums.
Cash.....no record of the transaction.......unless it is a business traveler.
Cash is undeclared incomeCash is undeclared income....
CC payments are deposited into a bank account....a record of the transaction....declared income.
With the CC transaction there is a % fee taken by the CC company...Generaly 2.5 - 3.5% of the transaction.........Granted.....not much reason there to be offering a 10% discount of the nightly room rate. Perhaps this is an option rather than providing a "third night free" or some other 50% discount of a room night for multiple night stays?
Most discount offerings are not combined
Now.....most are reading this as a 10% discount on the room rate.
What we don't know is....lodging tax....The lodging tax is variable state to state. It is generaly 6 - 10+ %
Depending on how the discount is handled.......If it is stated on the "total" nights stay......that would be including the lodging tax........add the lodging tax to the CC transaction fee and where are you?
Additionaly with cash.....as stated at the top.....undeclared income.
Not reported on income tax. With most businesses, liability insurance is determined by the gross annual income. Showing a lower gross annual income will lower the liability insurance annual cost.
So......think about the CC transaction.....lodging/sales tax is added on...Transaction fee is deducted from that total....Income tax, insurance premiums.
Cash.....no record of the transaction.......unless it is a business traveler.
That is what I initially thought too. Imagine my surprise when I went to pay my taxes online and discovered my state charges a 4% 'convenience fee' if you want to use a credit card.Joe Bloggs said:I know you cannot charge more for a credit card transaction.
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