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Old 03-17-2017, 02:29 AM
 
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withholding tax money because your ss will be taxed is a separate issue from working and going over the allowable limit in dollars. that is two different issues . usually the withholding is because your ss will be taxed .
our ss is taxed but right now just my wife is collecting a check . we have nothing withheld by them because we pay estimated taxes any way .

but once i collect and she gets a spousal adder then we will have them withhold taxes .
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Old 03-17-2017, 02:42 AM
 
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Quote:
Originally Posted by mathjak107 View Post
you can earn up to 45,000 or so if it is the year you will be fra after you collect ss but that amount is prorated .


lets say in 2018 you will be fra in october

you file for ss in july 2018 so you can earn up to 24,500 between july and december since that is 6 months so you are allowed 1/2 the amount .. the year before you are fra allows you to earn 3 dollars and give back one instead of giving back 1 out of every 2



.
another example is this .

i will be fra in october of 2018 . if i decide to collect instead at 65 in october 2017 and work, then oct , nov , dec are subject to being prorated at 1/4 of 16,920.00 . since 3 months is 1/4 of 16,920.00 i have to give money back if i earn more than 4230.00 in total for oct ,nov , dec .

so the clock starts ticking once you collect , and since 16,920.00 is the limit the fact the clock started ticking in october is prorated so that is why you are allowed only 4230.00 for the remaining 3 months .

starting in january 2018 i can earn almost 45k and give back nothing ..
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Old 03-18-2017, 10:29 PM
 
33,016 posts, read 27,337,170 times
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Quote:
Originally Posted by suzy_q2010 View Post
How Work Affects Your Benefits

I think this is what you are referring to.

"Sometimes people who retire in mid-year already have earned more than the yearly earnings limit. That is why there is a special rule that applies to earnings for one year, usually the first year of retirement. Under this rule, you can get a full Social Security check for any whole month you are retired, regardless of your yearly earnings.

In 2011, a person under full retirement age for the entire year is considered retired if monthly earnings are $1,180 or less. For example, John Smith retires at age 62 on October 30, 2011. He will make $45,000 through October.

He takes a part-time job beginning in November earning $500 per month. Although his earnings for the year substantially exceed the 2011 annual limit ($14,160), he will receive a Social Security payment for November and December. This is because his earnings in those months are $1,180 or less, the monthly limit for people younger than full retirement age. If Mr. Smith earns more than $1,180 in either of those months (November or December), he will not receive a benefit for that month. Beginning in 2012, only the yearly limits will apply to him.

Also, if you are self-employed, we consider how much work you do in your business to determine whether you are retired. One way is by looking at the amount of time that you spend working. In general, if you work more than 45 hours a month in self-employment, you are not retired; if you work less than 15 hours a month, you are retired. If you work between 15 and 45 hours a month, you will not be considered retired if it is in a job that requires a lot of skill or you are managing a sizable business."

The figures will be different for 2012, but the principle is the same. If you go over the $1220 per month, you do not get a check.

How does SSA determine how many hours a self-employed person - say, an online seller - works in a given month?
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Old 03-26-2017, 11:10 AM
 
Location: Cape Elizabeth
426 posts, read 504,277 times
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Quote:
Originally Posted by Gone Sailing View Post
I'm starting my retirement in April 2017 at age 63. I have been working in Yacht Sales full time but plan to now work part time. I have a rather large commission check of about $18,000 that was supposed to pay out in March before I retired but it has been delayed until April. I know I will lose my check for April but can I lose any more because I'm over the yearly limit in a normal full year. Under the first year rule it states that for any hole month I earn less than $1,410 a month I'm considered retired and will receive a SS check regardless of my yearly income. Is this true or can they penalize me for the entire year.
The 2017 limit for people NOT REACHING full retirement age in 2017 (you- since you are 63 and want to collect) is $16920.00. So, you already know that between your commission check of $18000.00 and your full time work in Jan- March, you are over the yearly limit.

You also plan to work part time April to Dec, and it seems like your plan is to stay under the $1410.00 (monthly limit) for those months.

So let's first calculate your Total income from work. although I don't know how much you made Jan- March, I will estimate you earned gross $4000.00 each of those months.

So you have Jan-March, $4000.00 x 3 = $12000.00.

April, a commission check of $18000.00 plus you said you still want to work, so I will add $1300.00 from the part time work you did in April, so that brings April to $19310.00.

May- Dec I will keep $1300.00 as an estimate (but just know that as long as you are $1410.00 or less in those months, you are DUE those months.

May-Dec is 8 or $1300.00x8=$10400.00.

Total income is $12000.00 + $19310.00 + 10400.00 = $31310.00.

So, the rule is ANY MONTH you earn under $1410.00 you are due a check, regardless of how high the annual amount is. So you are due May to Dec. That is called the monthly test and applies only in ONE YEAR, which for most people is the year they retire.

However, since the commission is a surprise and you also want to work in April, the commission check brings you over the monthly limit for April and your MONTH of ENTITLEMENT to SSA should NOT be April, but it should be May.

You see, not only are you not due the April check, you are carrying the one month extra reduction factor for the month of April. And, SSA does not refigure your reduction factor until you are OVER your full retirement age, which is not until the year you turn 66.

So, why carry the extra .56 reduction factor for all the checks in the intervening years?

Here is what you do, if you haven't done so already. You need to go to SS (make an appointment) - call 1-800-772-1213 to do that, and tell them you already applied for your retirement to be effective April, but need to change the month to May.

You are not too late, because even the April check does not arrive until May (and the May check in June). This way you can have the proper amount of reduction months and not be penalized for an unforeseen change of plans.

Now, there is one wrinkle that might, or might not work to your benefit. You said you worked in yacht sales, and it seems like your work will continue with the same employer and same line of work. If that is so, then do as I suggested and change your month of entitlement from April to May.

But, if you are retiring from yacht sales in March, and going to work at a totally different employer in April ( say Walmart) and your April earnings from Walmart are under the $1410.00, well then the commission received in April can be "credited" to the last month of work at the previous employer, and not go against you for April.

Here is a link to the SSA pamphlet about work and earnings in 2017. Please especially pay attention to pages 4 and 5 (and my answers to you assumed you are an employee, not self employed). You will see that WAGES count WHEN EARNED, NOT WHEN PAID, but self employment is different.

https://www.ssa.gov/pubs/EN-05-10069.pdf

Hope this helps.
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Old 03-26-2017, 11:19 AM
 
Location: Cape Elizabeth
426 posts, read 504,277 times
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Quote:
Originally Posted by freemkt View Post
How does SSA determine how many hours a self-employed person - say, an online seller - works in a given month?
Basically, SSA works on an honor system. We ask you to keep track of your hours and the rough rule of thumb is 45 hours or more, it counts as a "work month".

Under 15 hours, it is not a "work month".

Between 15-45, it depends on the level of skill needed and see this pamphlet from SSA: https://www.ssa.gov/pubs/EN-05-10069.pdf

Page 5 addresses it.
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Old 03-26-2017, 11:21 AM
 
105,971 posts, read 107,921,072 times
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most folks know first hand how well the honor system works when it comes to aspects of taxes where it is a non reported item .
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Old 03-26-2017, 11:32 AM
 
Location: Cape Elizabeth
426 posts, read 504,277 times
Reputation: 760
Quote:
Originally Posted by mathjak107 View Post
most folks know first hand how well the honor system works when it comes to aspects of taxes where it is a non reported item .
Well, that is true. But, the way it works in real life (meaning the way the SS representative evaluates the statement) is based on the type of work the self employed person had done.

If SSA sees that the SE person was an atty, architect, MD etc. earning 6 figures pre-retirement, they would have the 15 hour rule and would basically have to show that all their clients, patients, accounts had gone elsewhere and they pretty much have to "truly have given up" their work, their office space etc.

Now, for a shoeshine guy, (if they still have those in the lobby's of corporate buildings), he would have the 45 hour rule and we would just ask what days of the week, hours of the day they plan to work.

For the online seller, (the original poster) we could look on ebay (or where ever they sell), see the volume of sales etc plus be looking at their personal tax returns to see what kind of income they generated previously vs. their current allegation. If they have a credible plan and a credible allegation, SSA generally accepts it.

A lot of the investigation and evaluation of these situations has gone by the wayside in the past decade or so. That is because many of the self employed no longer collect pre-full retirement age. They wait until their full retirement age or age 70, where the monthly test is not an issue.
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