November 5, 2024 The Best Source of News, Culture, Lifestyle for Culver City, Mar Vista, Del Rey, Palms and West Los Angeles

Ask Rusty – Collecting SS and Income Taxes; early retirement and working

Dear Rusty:  My husband just starting collecting Social Security at his full retirement age. If he wants a part time job how much money does he have to stay under not to mess up his SS income? Someone told us he can make as much as he wants because they changed the law but my sister can only make up to a certain amount so we are concerned.  I am taking an early retirement, I will be 62. Do the same rules count for me as to how much money I can make after drawing SS?
Signed: Collecting but Still Working  
Dear Collecting:  Since your husband has reached his full retirement age, he is no longer subject to Social Security’s earned income limit; he can earn has much as he wants and it will not affect his Social Security benefit payments.  However, it may affect how much of his total Social Security income is taxable when you file your Federal Income Tax.  Assuming your income tax filing status is “Married Filing Jointly”, if your combined Adjusted Gross Income (including 50% of his annual Social Security benefit) is less than $32,000, none of his Social Security income is taxable.   If, however, your AGI is between $32,000 and $44,000, 50% of his total Social Security benefit is taxable as income; and if your AGI is more than $44,000, up to 85% of his total benefit becomes taxable income.  I suggest you speak with a Tax Advisor about how additional income from part time employment, when added to your other income sources (pensions, etc.), may affect the tax liability of your husband’s Social Security benefits.
Now as for you taking early retirement, note first that if you start your Social Security benefits at age 62 you will only receive about 74% of what you would otherwise get at your full retirement age (FRA), and this reduction will be permanent.  Also, when you file for benefits you will be “deemed” as filing for both your own benefit and any spousal benefit you may be entitled to from your husband’s work record.  But if you do retire early, the rules for working while you’re collecting Social Security are different.
Until you reach your full retirement age of 66 and 2 months you will be subject to an annual earned income limit, which for 2017 is $16,920 (this amount is subject to change each year).  If you earn over this amount for the year, Social Security will take back $1 for every $2 you earn over the limit by withholding future benefit payments.
The earnings limit and penalty for exceeding it become more generous during the year in which you reach your full retirement age: the earnings limit goes up to $44,880 (2017 amount) and the penalty is less – $1 for every $3 over the limit.  And of course, like your husband, once you reach your full retirement age you can earn as much as you want without penalty, but you should always take into account the effect of working on the tax liability of your Social Security income.  I’m not suggesting you shouldn’t work, only that you should understand the affect working has upon your income taxes.  Just like at work, you can choose to have income taxes withheld from your Social Security benefits, if appropriate.
Related Posts

The Willows: 30 Years Going Strong

November 5, 2024

November 5, 2024

Founded in 1994, The Willows Community School, located in Culver City, California, is a Developmental Kindergarten through 8th grade non-profit, co-educational...

Election Day Freebies and Discounts: Where to Eat, Drink, and Watch Election Results

November 4, 2024

November 4, 2024

From Free Doughnuts To Watch Parties, How To Unwind With Election Night Deals With this election day being one of...

Early Morning Call From Community Leads to Burglary Arrest in Culver City

November 4, 2024

November 4, 2024

Police Respond To Suspicious Activity Call, Arrest Suspect With Pickaxe Culver City police arrested a man early Friday morning in...

Culver City Police Department is Prepared to Ensure Community Safety During Election Week

November 4, 2024

November 4, 2024

Enhanced Patrols, Activated Emergency Center Ready, Culver City Voting Center is Open The Culver City Police Department has announced an...

Legendary Music Icon Quincy Jones Dies at 91 in Bel Air

November 4, 2024

November 4, 2024

Celebrated Musician, Producer Leaves an Indelible Legacy By Dolores Quintana Legendary musician, music producer, film and television producer, composer of...

Academy of Motion Picture Arts and Sciences Lays Off Longtime Archive and Library Staff

November 4, 2024

November 4, 2024

Downsizing and Restructuring Continue, Affecting Employees with Decades of Service By Dolores Quintana Last week, the Academy of Motion Picture...

LA County Opens 526 New Vote Centers for Early Voting, Announces Conditional Voting for Unregistered Residents

November 3, 2024

November 3, 2024

Metro LA Offers Free Rides on Election Day to Help Residents Get to the Polls Los Angeles County opened an...

New Aviation/Century Station Opens, Linking Metro’s C and K Lines

November 3, 2024

November 3, 2024

Metro’s Newest Station Paves the Way for Future LAX Transit Center The new Aviation/Century Station officially opened this week, marking...

H5N1 Detected in LA County Wastewater, Health Officials Urge Precautions for Residents

November 3, 2024

November 3, 2024

Los Angeles County Investigates Low-Level H5 Avian Flu Detected in Wastewater The Los Angeles County Department of Public Health is...

Two Events in Culver City This Weekend: Bike Registration and Dance Performance

November 1, 2024

November 1, 2024

Put the Brakes on Bicycle Theft and Enjoy an Evening of Dance and Interactive Art The Culver City Police Department...

All You Need to Know to Attend the Dodgers Victory Parade Tomorrow in DTLA

November 1, 2024

November 1, 2024

World Champions and LA’s Team to Greet Angelenos After Win of NY Yankees The Los Angeles Dodgers announced that their...

Beverly Hills City Government Agrees to a Stipulated Judgment After Blocking Abortion Clinic Opening

November 1, 2024

November 1, 2024

City to Implement Training, Oversight on Reproductive Rights Following Legal Settlement  California Attorney General Rob Bonta announced a legal agreement...

Dia De Los Muertos 2024: Here’s Where To Celebrate The Holiday Tradition This Weekend

October 31, 2024

October 31, 2024

Los Angeles Has a Variety of Ways to Explore Latino Culture and Honor Ancestors Starting just after Halloween, Dia de...

(Video) Downtown L.A. Reacts to World Series Victory

October 31, 2024

October 31, 2024

The Dodgers Are World Series Champs For The Eighth Time https://www.tiktok.com/t/ZTFtyDDKn/

Halloween Pre-Game Party Brings Chills and Spooky Thrills to The Rose Venice

October 31, 2024

October 31, 2024

Enjoy Halloween With Festive Cocktails, Appetizers, and a Costume Contest The Rose Venice in Venice is set to host a...