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Social Security Question:
I turned 62 in February of 2012, and am retiring August 15, 2012. I am a sole propietor of an LLC
Social Security Answer:
I turned 62 in February of 2012, and am retiring August 15, 2012.� I am a sole propietor of an LLC, which I plan on closing on August 15, 2012. Do receivables that were invoiced prior to, but collected after 8/15/12, count against my earnings limit? If I sell the LLC instead of closing it and accept a one year payout, do those post 8/15 payments count against the limit? SSA.gov states income from services rendered prior to the first month of entitlement, but received “in a year after the first year of entitlement” is excluded. What does that mean?
Support Replied ~ 07-12-2012 12:36:30
When you own a business, Social Security is concerned with the control that you have over your earnings. Since you are closing the business on 8/15/12, Social Security will consider that your last day of work. Earnngs after that date will be considered earned before that date. This is why it is important to show that your business is no longer running under your control after 8/15/12.
If you sell the business, then it is easy to show that you no longer own this business with the bill of sale. If you are closing down the business, then you must show proof that the business will not be operating by newspaper notices, notices to your suppliers, and other proofs your Social Security office asks you for. They can also take your retirement claim and put you in a suspense until they feel you are truly retired.
If you have a small business and have not earned over the $14000 for the las 5 years, then there is no problem at all since you don't make over the amount allowable anyway.
If you have any further questions, be sure to write back again....Good luck with your plans.....Carol
Your Comment ~ 07-16-2012 13:12:30
If I understand correctly, any services invoiced prior to my retirement date, but collected after are not counted against my post retirement earnings limit. If the sale agreement for the business allows for a 1 year payout, are those payments also exempt from the limit?
Support Replied ~ 07-16-2012 15:01:49
The payout for your business should not be posted as earnings.....Your accountant should know how to file them so IRS does not FICA tax them. And like I said, when you do your taxes at the end of the year it will show that you were paid the money in 2012, but your business stopped in August, so Social Security will not count that money against you.
The complication could come in 2014 if in 2013 you have posted earnings. If that happen , you should call Social Security and tell them that your busness closed in 2012 and that the money was payment for services done before you closed your busness.....Carol
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You should consult with your local Social Security Office before acting upon any information received as a response to your question on "Social Security Advisor".
"Social Security Advisor" is intended to provide accurate and authoritative information with regard to the subject matter covered. It is offered with the understanding that neither the publisher nor the author is engaged in rendering legal, accounting, investment or other professional advice or services.
Information obtained from RetirementCommunity.com, including e-mail responses from "Social Security Advisor" should be considered as general educational information. You must never rely upon the advice given here. Your individual situation may not fit the generalizations discussed. Only your local Social Security office can evaluate your individual situation and give you advice.
|In the news:
Read Carols comments in this BankRate.com Social Security article
Thank you so much. The amount of infomation you provided on our call went a long way in helping to resolve the issues I had with the social security rep I was working with.
Tom F. 04-22-2020
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Emily D. 03-30-2020
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