This question is probably better suited for my accountant. But he's a college kid and I can only usually get a hold of him by texting...so here goes:
I am eligible for SS benefits. There is a limit to the amount of money I can earn annually (without being taxed) after I begin to receive the benefits, until age 66 (a couple of years from now).
I own my corporation and I am an employee of the corp. I can't remember if it's a C or an S corp (another good reason to retire), but I receive a Schedule K-1 at the end of the year. The K-1 is a profit/ loss statement. The amount the company made (neg or pos) is reported on my personal 1040 by this Schedule K-1.
My question is:
If I begin receiving SS bennies can I reduce my employee pay to avoid any taxable income and satisfy the SSA while still reporting a positive number on the Schedule K-1?
Yeah, I know, asking a bunch of surveyors about taxes is like asking accountants about surveying...I just thought there might be another old geezer here that was familiar with what I was talking about.
thx
I don't know!
But I do want to point out that all that was text.:bye: :clap:
Well, if you have nothing to do for the next decade or so you could try this;
When you become cognizant enough to figure out whether you are an “S” or a “C” repost. 😉
Seriously, there is a difference, especially with SSA involved.
> I own my corporation and I am an employee of the corp. I can't remember if it's a C or an S corp (another good reason to retire), but I receive a Schedule K-1 at the end of the year.
Getting a K-1 suggests that your company is an S corporation (or an LLC), I think.
Since the income of your S-Corp "flows through" to you personally, I doubt that there are any tricks like that you can use. Better learn to take more days off to go for rides on the motorbike while you still can.
But definitely talk to your accountant. He needs the experience.
texting
I will honestly tell the whole world I don't know how to turn the predictive text OFF on my phone...I either get my one my grandsons or the wife to do it for me...:-$
Anybody with a last name of Cash needs to either learn to sing country western & wear black shirts, or plan on bending over for 'da man. 😉
On a similar note my 20 yr old vacuum cleaner puked a week or so ago. We did some calling and a bit of shopping and wound up at the local very reputable vacuum repair shop and bought a pretty solid totally refurbished super sucker Hoover something or other that is likely less than 10 yrs old. SWMBO loves it!! Therefore I love it.
$65 and no receipt, but do have a 30 day guarantee. As I'm putting it in my truck, he was placing the moola in his wallet. Keep in mind this guy is easily 75 yrs plus and loves doing what he does. No wonder.
I just love it, but doubt 'da man does.
In regards to being on the receiving end of all your contributions, I'd refer back to the first sentence. I plan on working until I slide down a mountain, since I've been self employed waaayyy too long. 14 yrs as a C corp, now an LLC for 8. Plus another 20 or so working for other people. I guess since I can't sing, I'll just bend over. But my name ain't Mr Cash....;-)
cheers
It's an "S" corp. You made me look in the file cabinet for last year's return. While that only took 15 seconds...it took thirty minutes to move enough stuff to get to the cabinet...:pinch:
But then I'm probably the only surveyor in the world with a messy office?
He did pass his CPA last year, he's actually in graduate school.
I think it would work as long as I lose money. Sadly, that's hard to do unless I want to buy every employee a truck and set of new GR-5s.
I'm thinking SWMBO is going to buy the company from me. I still don't know if that would work out with us filing jointly. I probably need to talk to a professional.
My Take On The IRS Interpretation Is That
All company assets are immediately available to a self employed owner and that income limitation applies to W-2 employment only.
You have 2 choices:
1/ Do not collect social security and work harder in your business.
2/ Put your business on hiatus and work as a W-2 employee for someone else while collecting social security. Then, once you reach the magic age, consider if you want to reactivate your business.
No matter what you claim as income, the IRS has the power after the fact to penalize you and take much more than you think you saved, return of all social security received, interest, penalties and possible jail time. Even if you win the costs will be excessive.
As always the small business person pays more in taxes, reference SEP and receives less in benefits.
Paul in PA
This doesn't answer your question directly but just to clarify... Your income is always taxable as are your SS benefits. They will withhold a percentage of your benefits if your income exceeds a certain level until your first year of 100% eligibility (66 years and xx months, I think). The good news is that anything they hold back will be added to later payments so you will actually get all your benefits in the long run. The bad news, and way more important, is that if you file early your benefit level is fixed at that forever, as low as 75%, I believe, except for the small COLA increases you might see.
Advice that most experts give is:
Keep working, build your base of earnings and take full retirement at 66 or later if you can.
It depends on how much you make. You will own taxes on your SS income if you make more than a certain amount. Not sure what that amount is, but I do know not paying yourself a salary will not help. Not only is what "passes thru" from the "S" corp counts but the amount that your wife makes is counted also. If you don't pay yourself a salary the "S corp" makes more, and turning it over to your wife won't help either.:-(
Good luck and happy retirement.
