Dear Rusty: Taxing Social Security benefits isn’t fair. It would benefit everyone if seniors could earn as much as possible without having their Social Security taxed. We would still be paying into Social Security which would help the fund. I also feel that all people earning over $100,000 should pay into Social Security because they can afford it. This would help fund Social Security without hurting anyone financially. Many seniors are struggling financially and should be able to earn as much as we can without a portion of our Social Security being taxed. Signed: Overtaxed Senior
This recording presents the viewpoints of the AMAC Foundation’s Social Security Advisory Staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. To request additional information, contact our Advisory Staff at 888-750-2622, or email us at [email protected].
How much can one earn as independent contractor once filing for SS with dependent child under 18?
Randy
If you plan on starting your retirement benefits before your reach your full retirement age (FRA) the earnings limit for 2022 is $19,560 annually or $1,630 per month. If you go over the limit, Social Security will withhold $1 for every $2 you go over. In the year you reach your FRA the earnings limit increases by almost 2/3, $51,960 annually, or $4,330 per month. If you go over the limit Social Security withholds $1 for every $3 you go over. This is done by withholding your benefits until they are paid back. As you have a child that will receive benefits on your record, their benefits will also be withheld if you go over the earnings limit.
As you are self-employed, your earnings limit is based on your net income. How the earnings limit will affect you depends on when you start benefits. If you start your benefits this year, you have two options available to you. If you have already gone over the annual limit for the year, you have an option to use the monthly limit for the rest of the year. As you are self-employed you would be subject to both the monthly limit of $1,630 and an hourly limit of 15 to 45 hours per month. The hourly limit you are allowed depends on your skill level. Any month you go over the monthly limit, Social Security will want both payments back, yours and your child’s. This only applies to your first year of taking benefits, beginning in January 2023 you will only be subject to the annual limit and no longer subject to an hourly limit.
Beginning in January 2023 the annual limit increases to $21,240. The year you reach your FRA it increases to $56,520.
If you decide to take your retirement benefits early to receive benefits for your child, it will result in a permanent reduction to your retirement benefit.
If you have further questions please contact us either by email at [email protected] or call (888)750-2622
Sharon Kleczka
AMAC Foundation
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