age 65 & 10 months.

[gman]

Sole prop.(beautician) takes some extra time off to stay under earnings limit to avoid repaying social security. In the year she tunrs 65 & 10months., she can earn any amount(aft the 10th month.) How do you convey that the earnings over the limit were all earned in
the 11& 12th months of the year? sch c filer.

[Brad Imsdahl]

You would have to keep books and records that prove the income was earned in the 11th and 12th month of the year. There is no entry on the tax return for this. It is all a matter of your bookkeeping system in proving when the income was earned.

[gman]

Months

Thanks, I realize they do not have an entry on the sch c., but I wondered how you explained it to the social sec adm. that it was earned in the last two months. I don't know if they would even ask. Anyone have any experience with this??

[ChEAr$]

It's easy

SSA very simply uses an annual method, dividing total net profit by 12 and attributing
that to each month in each time frame.

But the mechanics of reporting it I don't know. We do know of course that it has nothing
to do with schedule c and 1040.

[Brad Imsdahl]

SSA very simply uses an annual method, dividing total net profit by 12 and attributing
that to each month in each time frame.

But the mechanics of reporting it I don't know. We do know of course that it has nothing
to do with schedule c and 1040.

That method does not always produce the correct results.

Say I reach my full retirement age on October 31, 2007. I can earn up to $34,440 during the months of January 2007 through October 31, 2007. Starting November 1 through the end of 2007, I can earn a million dollars and still qualify for full benefits.

Averaging my yearly Schedule C on a per month income would far exceed what I can earn per month If I actually did earn a million dollars in November and December. Social Security in this case would require proof of what I actually did earn per month in order for me to keep all of my 2007 benefits.

[ChEAr$]

I did'na say

that was the only way to do it.

Just that was the way they usually do it.