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Ask Megan C Your Own Question
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 16576
Experience:  Licensed CPA, CMA, CFE, CGMA M.Accy Also Teach Accounting courses at Master's Level
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I am 13 quarters short of qualifying for SS. My job pays me

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I am 13 quarters short of qualifying for SS. My job pays me as "specially allocated long term capitol gain" and I have not gotten a W-2 in 20 years. What can I do to fix this?

Megan C :

I realize you have a question about social security. My goal is to provide you with excellent service, and help you better understand your options.

Megan C :

How are you today?

Megan C :

Do you still perform services for your job? What is the reasoning for the specially allocated long term capital gain? I don't understand that piece.

Megan C :

If you are working, you should be getting a wage. Is it your employer's choice to allocate your wages that way?

Customer:

I am a General Partner in a family partnership. All distributions are long term gains. My fellow GPs got their pay to be a specially allocated LTG years ago. I am afraid that I am stuck with this as I don't know what would happen if I should try to change it.

Megan C :

okay, thank you for that information

Customer:

I have made money in the stock market, but, once again, no W-2s.

Megan C :

Yes, do you have a side business, or could you open up a side business?

Megan C :

Are you open to working part time somewhere that pays into social security?

Customer:

Hdn't thought about it.

Megan C :

That would be the easiest way to get your credits.

Megan C :

You get one credit each quarter you earn over $1,160

Customer:

I guess I was wondering if I could just claim some income without a W-2 and pay the tax.

Megan C :

so you could work minimally and just get the basic credits just to get you qualified for benefits

Megan C :

Well, if you had a side business you could do that. It would be on schedule C and you would use schedule SE to calculate your employment taxes. You would not get a W-2

Customer:

I get interest income from some loans. Can I somehow use that? Make a little LLC or something?

Megan C :

No, interest income is not subject to self employment taxes.

Megan C :

You would have to provide a good/service for pay

Megan C :

Do you have a bunch of stuff you could sell on eBay?

Customer:

Wallmart greeter?

Megan C :

That would work.

Customer:

I guess I could try to buy and sell on E-bay. How much documentation is necessary?

Megan C :

Any work in which you get a W-2 would work. Unfortunately, either self employment or wages are required to earn credit.

Megan C :

Well, you will keep track of your profits. Then, at the end of the year you would claim the income you earned and deduct the cost of the items. You get a quarter of credit if you earn more than $1,160

Megan C :

So if you earned about $4,800 you would get your four credits for the year

Megan C :

Do this for a little over 3 years and you will have your minimum credits

Customer:

I actually own a % of the Limited Partnership that I get paid by. Any way I can go some form of self employment from that?

Megan C :

You would have your wages classified as guaranteed payments instead of specially allocated long term capital gains

Customer:

Would that have to be done by our CPA?

Megan C :

Yes, I would speak to your CPA about that and have them set you up with the right schedule to ensure you get your credits

Customer:

Thanks for your help. Any other advice before I go?

Megan C :

No, I just wish you the best of luck. I hope your CPA can get you squared away so that you don't have to do the self employment/walmart greeter thing

Megan C :

Before you leave, please rate my response as "excellent' using the feature located at the bottom of your screen

Customer:

I'm pretty sure I won't resort to that. LOL Thanks. Bye

Megan C and other Social Security Specialists are ready to help you
Thanks, Scott for your positive rating. Please come back and visit me any time you have a tax, finance, or social security question that needs answered. It was a pleasure working with you today.

Customer: replied 3 years ago.
Stop sending E-mails!
Hi Scott,

I'm sorry your still getting emails. I will contact customer support to let them know. Sometimes the system has some glitches in it but will sure to pass on your request.

Sorry again and I hope you have a great day

Megan.