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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.
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Self employment income, like regular employment income, is used to offset your social security earnings if you are under full retirement age.
In your case, your benefits will be reduced $1 for every $2 you earn over $15,120
This includes both your work through June and your new consulting income.
However, the consulting income is only counted as your net income after you deduct business expenses.
Social security will become aware of these earnings when you file your income tax return at the end of the year.
I thought these earnings would not be counted against SSI income in the year I filed, but would be counted in each subsequent year. I thought my income for this year, 2013 would not affect by SSI income. But next year i would be limited to earned income of $15,120.
No, it's any year that you are under full retirement age that you are impacted by that.
The $38,657 was earned from Jan. through June. I filed for SSI in September. I thought income only started counting once you filed for SSI retirement benefits.
There is a special first year rule, but to get that rule you cannot earn over $1,200 in a month or have substantial gainful activity - you have to truly retire. If you have become a consultant, you have not truly retired.
"Substantial services in self-employment" means that you devote more than 45 hours a month to the business or between 15 and 45 hours to a business in a highly skilled occupation.
Ah! Now I see why they ask these questions in the questionaire. For next year, I do not know if I will be allowed to continue as a consultant. The firm is using me on a 4 week basis right now. Because I don't have a contract what should I reasonably tell SSI on their form for 2014? Tell them $15,000 and if I start earning more, report it to SSI?
yes, that is what I would do for simplicity's sake
And you would only be eligible for your benefit for September and October, then not November and December under the first year rule.
Thank you, XXXXX XXXXX to understand.
Is there anything else you need clarification on?
Does SSI go by when you work or when you get paid? This could be weeks apart.
It goes by when you work for the first year rule, because of the hour limitations.
Earnings test goes by when paid.