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The Danger of Working “Off the Books”

Posted by Andrew J. Barovick | Jan 26, 2017 | 0 Comments

People in all walks of life are eventually offered the opportunity to work without paying taxes at some point. In addition to being illegal, many have found out that this tactic can come back to hurt them in the long run.

Certain professions are more prone to paying “off the books” or “under the table” than others, including:

  • Home health aides
  • Waiters and waitresses
  • Janitorial workers
  • Mechanics

Individuals can easily conceal their income in the industries listed above; wages for these workers are so low that workers deem it necessary to avoid taxes in order to stay above water financially. And sometimes, it is not the worker who wants to work off the books. Some workers, who are grateful to have a job at all, feel it's necessary to work off the books because of pressure from their employers to do so.

The problem is that many people who have worked off the books throughout their 20s and 30s find themselves in trouble if they ever need to collect Social Security Disability Insurance (SSDI). If they are injured, and have not been paying Social Security or Federal Insurance Contributions Act (FICA) taxes regularly, they may find they are eligible to receive only a fraction of what a tax-paying claimant would receive. Or they may have difficulty receiving any SSDI benefits at all. This is also true with Workers' Compensation Insurance.

When you receive your paycheck from an employer, you will notice, in addition to the usual federal and local income tax deductions, a series of other deductions, including a Social Security or FICA deduction. Think of this other deduction as an insurance policy premium. If you work and have these payments taken out over a period of time, you are guaranteeing that, if the time comes, you will receive the maximum benefits to commensurate with your years of premium payments and hard work.

Whatever the reason, the best advice is not to engage in the practice of “working off the books”. Report all your income “by the book,” thereby ensuring that you would be eligible to collect your maximum SSDI benefits in the future.

About the Author

Andrew J. Barovick

Mr. Barovick is a graduate of Columbia College and Cardozo School of Law. He began his legal career at the Queens District Attorney’s Office, where he tried over 20 felonies to verdict, and argued an equal number of appeals before the Appellate Division, Second Department, the New York Court of Appeals and the United States Court of Appeals for the Second Circuit.

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