Discussion - Member to Member Sales - Research Center
Discussion - Member to Member Sales - Research Center
I am about to apply for Social Security and Medicare as I turn 65 next year. I have some concerns based upon the information available to me regarding self-employment, the tests for income (if you counted my revenue dollar for dollar it would not be above the income test, let alone my 'profit' which I do report to the IRS and even pay Social Security tax on it) and the test for hours worked (Selling stamps online takes a LOT of time.... and based on their interpretation of the rules, I'd pretty much have to give up stamp dealing until January 2026 (my full retirement age) as the documentation claims if you work more than 45 hours a month, you're not retired, and if it's a job that requires a lot of skill (I'd say cataloging stamps and running an online business would be considered that) I can only work 15 hours a month).
Thanks for any input.... Jerry
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Sounds to me that a lot of what you are doing is a hobby because you enjoy playing with stamps. The fact that it brings in a little extra money to cover expenses is a bonus.
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I started collecting Medicare at age 57 and my solution was to quit generating any income over the last 8 years. Yuck. Instead, I donate my time and basically gave away most of my extra material (sold bits here and there but stayed under the limits for income).
Frankly, I felt a lot like I was forced into this due to the restrictions and policies. I had the ability to generate income but I could not risk losing the Medicare coverage since doing so would have meant trying to cover the $3.5+ million dollars in medical expenses. Dealing with Stage 4 cancer and being on dialysis there were some periods when my medical costs exceeded $50,000 for just the month.
I had/have supplemental insurance but even with the Medicare my annual gap insurance was $20,000 year. This system is awful, it basically forces people in my situation to NOT be productive. For me it only added to the stress, no one wants to feel non-productive. Trying to give something back to society helps a bit.
Don
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i had to "retire" at 53 1/2 with 28 1/2 years of service when the Kingston IBM plant closed down..IBM gave me a certain amount until i turned 62 and then they cut my pension in half when social security kicked in. My Father did better..he retired at 62 from IBM and collected his pension and security until he was 98 1/2. The company did not expect people to live that long.
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I retired at age 62 and began receiving social security benefits. I continued to work part time as a consultant for the next 10 years, working more than 45 hours almost every month. I never had any problem receiving benefits. Before I reached full retirement age if I earned more than the allowed amount my benefits were reduced.
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Don, move to Australia, where health care is free. You go to hospital, get treated, go home and never receive a bill.
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Jerry.....consult a CPA.
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"Jerry.....consult a CPA."
A Certified Financial Planner would be a better choice for this type of question.
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Darn....you forced me to respond. A CPA (tax specialist) will likely have a deeper understanding of what constitutes earned income for Social Security purposes. My opinion. Maybe biased as I was a CPA in my working life.
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With shipping costs,paypal, supplies etc; i am probably operating at a loss. Perhaps the government would prefer i declare myself a business so i could deduct expenses like scott catalogs, glassines, 102 cards .
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Phil....those are valid expenses if you are selling as a US taxpayer. If you are collecting as well, it gets a bit hazier.
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I appreciate all the responses, but my issue is with the hours worked test - not the income test. I have no issues with the income test, I don't sell enough to hit it if I declared dollar for dollar as income (which with the new 1099 rules, I would have to, but I report that income as a self-employed business. And I already have a tax accountant but he doesn't know anything about this issue.
I've attached the relevant text from the Social Security document:
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bigcreekdad, i don't think i will have to worry about a 1099 this year..but its a shame...they consider the $600 as profit and you can not deduct expenses against it. We need a new tax system.
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"they consider the $600 as profit and you can not deduct expenses against it."
That is incorrect. The 1099 reports income (revenue) not profit. I receive a 1099 every year from my property manager for my rental property. It reports my gross receipts from which I subtract my rental expenses (insurance, property tax, insurance, maintenance and repair, etc.).
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Jerry,
The limitations you describe are part of the Special Earnings Limit Rule. This allows you to receive Social Security benefits for months in which you qualify under the hours worked rule even though you have already earned over the maximum allowance. This would be relevant only for part of the first year in which you retire. For example if you had earned income of $30,000 through June of the year of your retirement, you could still collect your benefits for the remainder of the year if you qualify under the Special Earnings Limit Rule. In the year following your retirement there are no restrictions on hours worked as long as your income is below the threshold. You are eligible for Medicare at 65 whether you collect social security or not.
A Certified Financial Planner should be able to confirm this for you.
https://www.ssa.gov/benefits/retirement/ ...
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If there is anyone on this board for whom the subject describes their current situation, I'd like to hear how you are handling this.
I am about to apply for Social Security and Medicare as I turn 65 next year. I have some concerns based upon the information available to me regarding self-employment, the tests for income (if you counted my revenue dollar for dollar it would not be above the income test, let alone my 'profit' which I do report to the IRS and even pay Social Security tax on it) and the test for hours worked (Selling stamps online takes a LOT of time.... and based on their interpretation of the rules, I'd pretty much have to give up stamp dealing until January 2026 (my full retirement age) as the documentation claims if you work more than 45 hours a month, you're not retired, and if it's a job that requires a lot of skill (I'd say cataloging stamps and running an online business would be considered that) I can only work 15 hours a month).
Thanks for any input.... Jerry
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
Sounds to me that a lot of what you are doing is a hobby because you enjoy playing with stamps. The fact that it brings in a little extra money to cover expenses is a bonus.
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
I started collecting Medicare at age 57 and my solution was to quit generating any income over the last 8 years. Yuck. Instead, I donate my time and basically gave away most of my extra material (sold bits here and there but stayed under the limits for income).
Frankly, I felt a lot like I was forced into this due to the restrictions and policies. I had the ability to generate income but I could not risk losing the Medicare coverage since doing so would have meant trying to cover the $3.5+ million dollars in medical expenses. Dealing with Stage 4 cancer and being on dialysis there were some periods when my medical costs exceeded $50,000 for just the month.
I had/have supplemental insurance but even with the Medicare my annual gap insurance was $20,000 year. This system is awful, it basically forces people in my situation to NOT be productive. For me it only added to the stress, no one wants to feel non-productive. Trying to give something back to society helps a bit.
Don
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
i had to "retire" at 53 1/2 with 28 1/2 years of service when the Kingston IBM plant closed down..IBM gave me a certain amount until i turned 62 and then they cut my pension in half when social security kicked in. My Father did better..he retired at 62 from IBM and collected his pension and security until he was 98 1/2. The company did not expect people to live that long.
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Login to Like.
re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
I retired at age 62 and began receiving social security benefits. I continued to work part time as a consultant for the next 10 years, working more than 45 hours almost every month. I never had any problem receiving benefits. Before I reached full retirement age if I earned more than the allowed amount my benefits were reduced.
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
Don, move to Australia, where health care is free. You go to hospital, get treated, go home and never receive a bill.
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
Jerry.....consult a CPA.
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
"Jerry.....consult a CPA."
A Certified Financial Planner would be a better choice for this type of question.
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this post
re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
Darn....you forced me to respond. A CPA (tax specialist) will likely have a deeper understanding of what constitutes earned income for Social Security purposes. My opinion. Maybe biased as I was a CPA in my working life.
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
With shipping costs,paypal, supplies etc; i am probably operating at a loss. Perhaps the government would prefer i declare myself a business so i could deduct expenses like scott catalogs, glassines, 102 cards .
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
Phil....those are valid expenses if you are selling as a US taxpayer. If you are collecting as well, it gets a bit hazier.
Login to Like
this post
re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
I appreciate all the responses, but my issue is with the hours worked test - not the income test. I have no issues with the income test, I don't sell enough to hit it if I declared dollar for dollar as income (which with the new 1099 rules, I would have to, but I report that income as a self-employed business. And I already have a tax accountant but he doesn't know anything about this issue.
I've attached the relevant text from the Social Security document:
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
bigcreekdad, i don't think i will have to worry about a 1099 this year..but its a shame...they consider the $600 as profit and you can not deduct expenses against it. We need a new tax system.
Login to Like
this post
re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
"they consider the $600 as profit and you can not deduct expenses against it."
That is incorrect. The 1099 reports income (revenue) not profit. I receive a 1099 every year from my property manager for my rental property. It reports my gross receipts from which I subtract my rental expenses (insurance, property tax, insurance, maintenance and repair, etc.).
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re: Collecting Social Security before full retirement age while selling stamps part-time (self-employment)
Jerry,
The limitations you describe are part of the Special Earnings Limit Rule. This allows you to receive Social Security benefits for months in which you qualify under the hours worked rule even though you have already earned over the maximum allowance. This would be relevant only for part of the first year in which you retire. For example if you had earned income of $30,000 through June of the year of your retirement, you could still collect your benefits for the remainder of the year if you qualify under the Special Earnings Limit Rule. In the year following your retirement there are no restrictions on hours worked as long as your income is below the threshold. You are eligible for Medicare at 65 whether you collect social security or not.
A Certified Financial Planner should be able to confirm this for you.
https://www.ssa.gov/benefits/retirement/ ...
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