Social Security for Self Employed

[Donanita]

Client started receiving ss this year. Has farm income at a profit. As to the reduction 1 for 3 is this calculated on the gross or net income

[gman]

Net

Net Income

[Roland Slugg]

Net income, not gross sales

Dear Donanita

The reduction is based on NET income above the allowed limit allowed.

Btw, the $1 for $3 take-away only applies in the year a person reaches his "full retirement age," and the earnings limit is also increased for that year and that year alone. In prior years the give-back is $1 for every $2 earned above the limit. Those earnings limits for 2008 are $13,560 and $36,120, and the $36,120 limit only applies to those months in the calendar year prior to the month the recipient reaches his "full retirement age."

You may read more by clicking here: http://www.ssa.gov/pubs/10069.html

[Donanita]

Thanks

Thought it was the net but wasn't sure.

[Davc]

If they didn't collect SS all year they can lose some benefits even with a loss.