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02-28-2010, 01:27 PM
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#15
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Senior Member
Monaco Owners Club
Join Date: Nov 2008
Location: Melbourne & Marathon, Florida
Posts: 1,537
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Yes this is true. The Social Security website has some good examples on this scenario and why it might be beneficial in certain circumstances.
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2005 Safari Cheetah 38PDQ - 2009 Ford Flex
Me (Gatogonow), The Boss (DW), Honey Bunny, Maggie May and Mollie Kay (The Gatos)!
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03-01-2010, 05:35 AM
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#16
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Registered User
Monaco Owners Club
Join Date: May 2009
Posts: 3,198
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Quote:
Originally Posted by Jim Stewart
If you do not work in your company and it is a Sub Chapter S Corporation, you can pay the profits to yourself without paying SS Tax. You receive a K1 for the income and pay only ordinary Income Tax on the profit. That is about the only way to avoid the SS Tax. If you work in the company, you are required to pay yourself a comparable income similar to what you would have to pay someone for a similar position to do what you do and pay the SS Tax.
In addition, if you own the company and the company pays for your health insurance, you must pay income tax on the amout paid for you by the company. If you have a company auto and you use it for personal business, you must pay tax on the portion that is used for personal business. Also, if you drive a nicer auto than someone else of similar position within your company, the IRS can decide that that is also a perk and make it subject to income tax.
Don't you love the Gov!
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Yes, the above in all three cases is true for me.
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03-14-2010, 11:56 PM
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#17
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Senior Member
Join Date: May 2009
Posts: 573
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Quote:
Originally Posted by JimM68
I'm hoping someone here might be able to answer this or point me in the right disrection to find a definitive answer. I have searched, both here and elsewhere. The government websites are like microsofts, ever expanding circles of questions, with not an answer to be found.
How are SS benefits calculated, and what is the maximum for a married couple, and how does both having worked figure into it?
(my mother, who never worked much or made much, gets SS {$734/mo} based on my fathers income, she divorsced him 40 years ago!)
Here's the deal.
We're small business owners. As such, we control our income as well as how it is distributed to us. We also have to pay both the employees AND the employers halves of SS and medicare taxes on W2 wages!
So, for the past 20 some years, we've made our W2 wages the minimum our accountants have said we could get away with, mid 70k's combined for both. (not each)
The bulk of our income is propery rental income and corporate dividends.
We can juggle these 3 sources any way we want to, it's all coming from the same pot.
I'm 52, my wife is 46 or so.
How will the govt. calculate our SS benefits?
Will we see an increase if one of us has W2 income near the max?
Both?
How many years back do they use to figure this?
At nearly 20% payroll tax rates for SS and medicare combined, is there a payback, or is it a losing proposition regardless?
Serious questions looking for serious answers. Before anyone starts ranting, what we've put into the system over our working lives adds up to 2 grand a month if we rcv benefits for 20 years. If my government had permitted me to keep my money and privately invest it, it would be $7000 a month or more! So lets keep political discussions out please.
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each year near your birthday, ss sends out a letter with the amounts your get at 62 or full retirement age.
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