Social security programs are very vital for all workers hence it’s important for everyone to familiarize themselves with them. Usually, there are three main types of social security programs: disability (SSDI) benefits, retirement benefits, and Supplemental Security (SSI) benefits. For anyone with plans to get started with their own business, different steps are needed alongside specific plans based on what you will be collecting.
All recipients must come up with a concrete formal plan of doing business that takes into consideration the effects that doing work while getting benefits will have on their situation on financial terms. Working while at the same time getting benefits can also interfere with other benefits like the section 8 housing benefits. The most important thing to note is that social security benefits can be reduced by a given percentage for every dollar made. This is however affected with some exceptions.
Taking care of your Social Security Retirement Benefits
When starting a business, it is important to give notice to the Social Security Administration (SSA). The SSA will make a special evaluation as to whether you retired based on the income you were getting on an annual basis or based on your working hours in self-employment. This assessment is not needed if you have attained the full age of retirement. Therefore, it is important to be aware of this, more especially in the year you were born.
The next thing to do after that is to prepare and file your individual IRS tax returns not forgetting IRS Schedule C as required by the April due date every year. On top of that, your self-employment income should be reported to the SSA. The completion of Schedule C will help establish your self-employment earnings. It is not necessarily the entire amount from your business proceedings because deductions can be made based on the expenses incurred in running the business. In that case, the SSA will factor in your net income only that is usually calculated and submitted via IRS Schedule C.
The SSA has the mandate to calculate the new benefits per month by taking $1 from your benefits per every $2 you make more than $17,040 up to when you get to your full age of retirement. The SSA will then deduct a $1 for each $3 for earnings more than $45, 360 in the year when retirement age is attained. It is also important to note that the SSA will not make deductions from your accrued benefits when after reaching your full retirement age birthday. These figures apply as at 2018 although they can change from time to time on an annual basis.
Beneficiaries of Social Security Disability (SSDI)
You can make efforts to control your self-employment net earnings to under $850 every month over 9 months in 2018 and at the same time work for not more than 80 hours every month. Here, benefits will not be affected should you be able to do this. Remember that this is your “trial work period” and any hours or earnings under these amounts do not add up to any reduction or penalty in the accrued benefits. Corey Pollard, a top-rated social security disability lawyer Richmond VA reiterates that the nine months don’t have to be consecutive.
After this trial work period, earnings can go up to an average of $1180 every month and that does not affect your social security benefits over a period of 36months of extended eligibility. Once the “trial work period” and the extended period have lapsed, the SSA will make an assessment to find out whether you have taken part in “substantial gainful activity” or not. This assessment can lead to a possible ruling declaring you “not disabled with a possibility that can see your disability benefits terminated.
Beneficiaries of Supplementary Security (SSI) Benefit
The SSI benefits are cut down by $1 for every $2 for each month that you get from net self-employment earnings more than $65 in 2018. If you have a disability, you can subtract from your earnings the costs of services and items for the condition that you have been paying for. Just as is the case with other types of benefits, it is important to report your absolute earnings to the SSA every year.
If you carefully take note of these facts as you start your business, you will not lose your social security benefits. For retirement benefits, preparing and filing IRS tax returns together with the IRS Schedule C by the deadline of the April of each year is required with a report of the Schedule C earnings also made to the SSA.