Collecting SS and income taxes; early retirement and working – Arizona News

Collecting SS and income taxes; early retirement and working – Arizona News

Dear Rusty:

My husband just starting collecting Social Security at his full retirement age. If he wants a part time job how much money does he have to stay under not to mess up his SS income? Someone told us he can make as much as he wants because they changed the law but my sister can only make up to a certain amount so we are concerned. I am taking an early retirement, I will be 62. Do the same rules count for me as to how much money I can make after drawing SS? Signed: Collecting but Still Working

Dear Collecting:

Since your husband has reached his full retirement age, he is no longer subject to Social Security’s earned income limit; he can earn has much as he wants and it will not affect his Social Security benefit payments. However, it may affect how much of his total Social Security income is taxable when you file your Federal Income Tax. Assuming your income tax filing status is “Married Filing Jointly”, if your combined Adjusted Gross Income (including 50% of his annual Social Security benefit) is less than $32,000, none of his Social Security income is taxable. If, however, your AGI is between $32,000 and $44,000, 50% of his total Social Security benefit is taxable as income; and if your AGI is more than $44,000, up to 85% of his total benefit becomes taxable income. I suggest you speak with a Tax Advisor about how additional income from part time employment, when added to your other income sources (pensions, etc.), may affect the tax liability of your husband’s Social Security benefits.

Now as for you taking early retirement, note first that if you start your Social Security benefits at age 62 you will only receive about 74% of what…

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