Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I filed bankruptcy in 2009 and virtually liquidated

Customer Question
everything I owned. I...
I filed bankruptcy in 2009 and virtually liquidated everything I owned. I was unable to find employment for 2 years. But now I have a job earning 45,000 per year and I am still drawing social security. I thought this was the perfect opportunity to build up a savings, however, between the NC Personal Income Tax and the Federal Income tax on the social security + salary, it has taken me back down to zero.
Question: I can get my employer to pay me as a self-employed contract employee. Is this a solution to the exorbitant taxes I will have to pay for 2015 for the coming year 2016?
Question: are there any other ways I could still keep working and avoid the "penalty" of having the social security past 25,000 wages.
Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 6 minutes by:
2/22/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,360
Experience: Taxes, Immigration, Labor Relations
Verified

The issue is not of having income - regardless if that is income from wages or from self-employment - but having income will trigger tax liability.

So during "fat" years when your income is relatively larger - you may make contributions into qualified retirement plan and defer tax liability.

So during years with relatively low income you will take distribution to supplement your social security income and will have lower tax liability.
Another issue that a social security may be partly taxable - and that what you meant under the "penalty"

So if you are below your full retirement age - you might better to stop your social security benefits and let them grow.

You may do that up to age 70.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Wallstreet Esq. Your Own Question
Wallstreet Esq.
Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
586 Satisfied Customers
Experience: 10 years experience

Wallstreet Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I have an s-corp, how much can i contribute for tax year
Hi I have an s-corp, how much can i contribute for tax year 2017? Also, i have seceral iras and learned the hard way that a sepIra was bad advice from my accountant! simple IRA or traditional? … read more
Lev
Lev
Tax Advisor
33,360 satisfied customers
In 2016 my S-corp went out of business in February. There
In 2016 my S-corp went out of business in February. There were major losses, not just from operations but also from balances being called due on lease defaults. We had losses the past 2 years prior an… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
My only income is social security. I am a widow. no
My only income is social security. I am a widow. no dependants an do not qualify for 1040EZ. Do I still need to file tax returns … read more
Lev
Lev
Tax Advisor
33,360 satisfied customers
I am 82 years old and taken all deductions. How much tax do
I am 82 years old and taken all deductions. How much tax do I owe on 13,130.00 … read more
Lev
Lev
Tax Advisor
33,360 satisfied customers
My mother died in 2015. I immediately opened up probate and
My mother died in 2015. I immediately opened up probate and sent two credit cards notice. Neither of them made a claim. I recently received a 1099-C for one of the credit cards for 2016. I filed an in… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Can we avoid self employment tax by paying ourselves wages?
I have a very small restaurant that my wife (and 50% partner in the LLC) run on a daily basis. We have a couple of employees but primarily we run the business from food production to cleanup and every… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
Social Security Related Question 1) First, let me provide
Social Security Related Question1) First, let me provide the Background CalculationsSay I start collecting Social Security at 62. For sake of calculation assume it is $1000 per month. And I continue w… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am collecting Social Security of $25,000 per year, and
I am collecting Social Security of $25,000 per year, and working part time. … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,453 satisfied customers
I have clients who set up an SCorp in 2015. I didn't know
I have clients who set up an SCorp in 2015. I didn't know until today when I received their computer printouts that neither of them took salary in 2015; everything is shown as "draw." Where should thi… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I am a 62 year old male, and have decided to retire, and start
I am a 62 year old male, and have decided to retire, and start collecting social security early (rather than waiting till age 65 or beyond.) My income in 2016 will be zero (other than social security)… read more
Lev
Lev
Tax Advisor
33,360 satisfied customers
I am in the process of closing an S-Corp. I am the only
Customer: I am in the process of closing an S-Corp. I am the only shareholder. I have mostly a cash assets to return to myself. i also listed since 2013 year some office assets chair and computer. I p… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
My husband & I own a small business in WI. (He is age 65 & I
My husband & I own a small business in WI. (He is age 65 & I am 64). He does not collect social security yet. I have been told that I should be drawing a wage under his social security as I am not a p… read more
Lev
Lev
Tax Advisor
33,360 satisfied customers
Getting ready to file 2014 tax returns. We own a small
Hello, Getting ready to file 2014 tax returns. We own a small business, and I can either show $30,000 loss, which is legit, or a $70,000 profit, but I started to draw SS when I hit 62, because I lost … read more
Lev
Lev
Tax Advisor
33,360 satisfied customers
I am interested in hiring a sales person. Revenue will not
I am interested in hiring a sales person. Revenue will not be booked until 2016 on which he will get material commissions. If I pay him a recoverable draw of $500,000 for the balance of this year, do … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
If a person has little income, but has a large discharged student
If a person has little income, but has a large discharged student loan, disability discharge, and cannot work, there is still a tax problem. A person is only insolvent to the extent their liabilities … read more
socrateaser
socrateaser
1,031 satisfied customers
Difference between subcontractor vs. independent contractor?
Could you please help me understand the difference between the designations of subcontractor vs independent contractor vs contract/labor?… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
what is the best way to structure a small business to save
what is the best way to structure a small business to save the most on taxes? Myself and a partner are starting a small used car lot and are now structured as a general partnership, for the main purpo… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
I have a good friend who is trying get out of the mortgage
I have a good friend who is trying get out of the mortgage business to go back to school. He has been on a commission basis but his employer has been paying him a draw, now with him leaving they are t… read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x