“Here are my pay stubs. I know it doesn’t show that I am making much money, but I do lots of work under the table.”
I understand “working under the table”. It seems like a good deal, doesn’t it? No income taxes. No Social Security taxes. No unemployment comp taxes. You can keep all of the money for yourself!
But looking at it up close, maybe it isn’t the deal you think it is. Recently I interviewed a possible client who wished to file for bankruptcy. He was a former laborer, and unable to work because of physical ailments that have taken their toll over time. He was collecting over $600.00 a month from Social Security, which seemed rather low.
He told me that much of his life, he worked under the table. Then the low income made sense. By working so much of his life in this way, he avoided paying taxes, but he also didn’t pay much into the Social Security fund.
Instead of getting about $1,500 to $2,000 per month like many others like him who paid into the system, he is getting a ridiculously low amount. I don’t see how he is going to afford anything.
Let’s do some numbers. Let’s suppose he lives to be 80, and that he has cheated himself out of $1,000 per month for those years by working under the table. That would be $12,000 per year for 18 years or a total of $216,000 that he has lost. Maybe he saved that much in taxes, maybe not.
But what is it worth being in poverty for the last two decades of your life because you saved some money in taxes when you were younger?
Of course, there are other disadvantages to working under the table. There were times when he was working this way that he was hurt and times when he was laid off. But since neither he nor his employer were paying taxes, there was no unemployment compensation and no worker’s compensation. Is this a risk you want to take? What if you became seriously injured at work when you were younger and had to face most of your lifetime without a reasonable income?
I am not a fan of working under the table. I have seen my share of horror stories of clients that have done this and realized too late they have made a mistake. And if you are going to file for bankruptcy, you need to tell the truth, under penalty of perjury, so you should not be working under the table when you come to ask the United States Bankruptcy Court for permission to discharge your debts.
Stop doing your employer a favor. It is your employer who benefits the most by this and who is taking advantage of you, not the other way around. Look for a legitimate company and pay into the system; it is really for your own good. Then come to Steidl and Steinberg and let’s discuss ways to get your debt under control.