If you receive income from a variety of sources like rental properties, pensions, and regular wages, it may be confusing to know what must be made visible to Social Security. Below you'll find the types of earned income that counts for Social Security purposes. If you have any unanswered questions, contact an SSA office or Disability lawyer. At The Law Offices of James F. Aspell, P.C. we can work with you to clear up any questions related to your Connecticut Social Security Disability Claims and benefits..
The SSA defines earned income as “income from wages or net earnings from self-employment.” For example, along with your regular wages, bonuses, commissions, vacation pay, and severance pay can all count towards earned income and must be made visible to the SSA.
The current tax rate for social security withholding is 6.2% for the employee and 6.2% for the employer, or 12.4% total. There is a wage base limit for Social Security tax. For 2016, the maximum earnings that are subject to social security tax are $118,500.
Self-employment income does not fall under wages since there is no employee-employer relationship. As such, there is a self-employment tax on the earned income of those who are self-employed. These taxes are paid directly to the IRS.
Keep in mind that if you are working while receiving your Social Security retirement benefits, the benefit amount you receive may be reduced depending on your earned income. The same earned income guidelines apply in this scenario.
Non-work income such as annuities, interest or dividends, and pensions may require you to pay income tax, but they will not be on your Social Security record. Capital gains, veterans, government or military retirement benefits, and inheritances also fall under the non-work income category.
Your earnings will determine how much Social Security you receive at retirement, so it's important to be sure that the SSA has your correct earnings information. Any mistakes should be reported to the SSA immediately. If you're curious about your potential benefit amounts, you can use the benefits calculator online to see your estimated retirement benefits, disability and survivor benefits.
If you are unsure about your Social Security income or benefits and what counts as earned income,contact an experienced Hartford Connecticut Social Security attorney. We are professional SSA and disability lawyers in Farmington, Connecticut . We're dedicated to providing quality and experienced services to you in all of your Social Security or Disability needs.