My client offered to pay me in cash, but asked for a discount if he does.
Looking for advice on how much of a discount should I offer him, if any?
Thanks!
luvu
Feb 28, 24 9:22 pm
Tax avoidance/ black money or …
Wilma Buttfit
Feb 28, 24 10:06 pm
Client expectations are likely that you won’t pay taxes on the income and wants his cut of the savings. I say no. Not a good look.
bowling_ball
Feb 28, 24 10:57 pm
I've only ever traded services for beer - three projects so far. (Before anybody gets upset, they were 3 hours of work each, for brewery patio permits. Not even worth the time to invoice, really.)
Non Sequitur
Feb 28, 24 11:23 pm
I also trade services for booze. It's easier that way and it's always for friends and family.
Wilma Buttfit
Feb 29, 24 5:27 am
In the US, the tax man says trades are still subject to income tax.
Richard Balkins
Feb 29, 24 6:07 pm
Where do they get the idea that we don't pay taxes on the income? Donald Trump?
proto
Feb 29, 24 10:17 am
Does accepting cash actually save you any money?
Are you accepting credit & covering associated transaction fees?
If not, why would you say yes?
reallynotmyname
Feb 29, 24 12:44 pm
OP needs to politely run away from this client. The person probably cheats on their taxes and is offering the OP the opportunity to do the same. They have revealed themselves to be shady and they may well want to shady in other areas of the project like compliance with zoning and building codes.
A legit discounting scenario would be if the client agrees to pay the fee upfront and the architect benefits from the improved cash flow you get by not having to wait for payment after services are completed.
Chad Miller
Feb 29, 24 1:20 pm
No discount at all. The services you provide aren't being reduced and you're still going to pay taxes on this. As reallynotmyname mentioned - this client is unethical and you shouldn't take any work from them if you value your reputation.
reallynotmyname
Feb 29, 24 1:53 pm
At best, the client is uninformed and mistakenly thinks that an architect's business economics are similar to a liquor store or gas station where there are different prices for cash or credit payments. We're not building in credit card merchant fees into our prices, so we have nothing to discount in that regard.
Wilma Buttfit
Feb 29, 24 5:23 pm
I’ve noticed a lot of residential contractors take cash and discount for it.
Non Sequitur
Feb 29, 24 1:56 pm
All our invoices are paid either via cheque or etransfer... and we add the required tax ontop of our fee. Is anyone accepting payment via credit card or thick brown paper envelopes? I'd like to see a client come in with a suit-case with 50k in cash just to cover his last month's invoice.
reallynotmyname
Feb 29, 24 2:06 pm
Back when we still did residential, we would have a very, very small percentage of people pay smaller invoices with cash. We also offered credit card with Square, but we never had any takers. The Square device is now in a junk drawer somewhere.
joseffischer
Feb 29, 24 2:58 pm
the recession was a weird time (also just residential). Got into a flow of scheduling invoice receipt days monthly where I'd round up (after reminder emails) a bunch of payments. I'd often roll into the bank by 4 with way more money than a guy in torn jeans and boots should be carrying
Wilma Buttfit
Feb 29, 24 5:25 pm
I got paid in cash once. Took me about 2 years to spend it all. :)
kjpn
Feb 29, 24 6:11 pm
wait what? you charge sales tax??
Non Sequitur
Feb 29, 24 7:22 pm
We have to. 13% in my province to all goods and services and architecture fees count as services. All our proposals are pre-tax number and we add 13% to all invoices.
t'is all good tho because those government monies in part make sure I don't loose my house if ever I need to spend 10mins at the hospital. Hurray for communist canada.
smaarch
Feb 29, 24 11:46 pm
I long ago chose to stay away from this sort of client. The nature of a practice is you get to set your own terms. It's your call. A younger Architect friend called me the other night not sure what to do. A contractor negotiated a slightly higher fee for him.....and still the fee is fully half of what it should be.....and demanded a kickback. Me...I laugh. I stay away from this crap. You are going to pay for it in one form or another.
My client offered to pay me in cash, but asked for a discount if he does.
Looking for advice on how much of a discount should I offer him, if any?
Thanks!
Tax avoidance/ black money or …
Client expectations are likely that you won’t pay taxes on the income and wants his cut of the savings. I say no. Not a good look.
I've only ever traded services for beer - three projects so far. (Before anybody gets upset, they were 3 hours of work each, for brewery patio permits. Not even worth the time to invoice, really.)
I also trade services for booze. It's easier that way and it's always for friends and family.
In the US, the tax man says trades are still subject to income tax.
Where do they get the idea that we don't pay taxes on the income? Donald Trump?
Does accepting cash actually save you any money?
Are you accepting credit & covering associated transaction fees?
If not, why would you say yes?
OP needs to politely run away from this client. The person probably cheats on their taxes and is offering the OP the opportunity to do the same. They have revealed themselves to be shady and they may well want to shady in other areas of the project like compliance with zoning and building codes.
A legit discounting scenario would be if the client agrees to pay the fee upfront and the architect benefits from the improved cash flow you get by not having to wait for payment after services are completed.
No discount at all. The services you provide aren't being reduced and you're still going to pay taxes on this. As reallynotmyname mentioned - this client is unethical and you shouldn't take any work from them if you value your reputation.
At best, the client is uninformed and mistakenly thinks that an architect's business economics are similar to a liquor store or gas station where there are different prices for cash or credit payments. We're not building in credit card merchant fees into our prices, so we have nothing to discount in that regard.
I’ve noticed a lot of residential contractors take cash and discount for it.
All our invoices are paid either via cheque or etransfer... and we add the required tax ontop of our fee. Is anyone accepting payment via credit card or thick brown paper envelopes? I'd like to see a client come in with a suit-case with 50k in cash just to cover his last month's invoice.
Back when we still did residential, we would have a very, very small percentage of people pay smaller invoices with cash. We also offered credit card with Square, but we never had any takers. The Square device is now in a junk drawer somewhere.
the recession was a weird time (also just residential). Got into a flow of scheduling invoice receipt days monthly where I'd round up (after reminder emails) a bunch of payments. I'd often roll into the bank by 4 with way more money than a guy in torn jeans and boots should be carrying
I got paid in cash once. Took me about 2 years to spend it all. :)
wait what? you charge sales tax??
We have to. 13% in my province to all goods and services and architecture fees count as services. All our proposals are pre-tax number and we add 13% to all invoices.
t'is all good tho because those government monies in part make sure I don't loose my house if ever I need to spend 10mins at the hospital. Hurray for communist canada.
I long ago chose to stay away from this sort of client.
The nature of a practice is you get to set your own terms.
It's your call.
A younger Architect friend called me the other night not sure what to do.
A contractor negotiated a slightly higher fee for him.....and still the fee is fully half of what it should be.....and demanded a kickback.
Me...I laugh. I stay away from this crap. You are going to pay for it in one form or another.
Thanks everyone for your advice!
-Mookey