Hello Larry,
With regard to the earnings test for someone taking benefits before FRA, can net self employment income be reduced by making retirement plan contributions to avoid exceeding the $15,720 limit? Also, what kind of documentation needs to be provided to Social Security regarding earnings, retirement plan contributions (if given consideration) and business expenses? Lastly, how often must this information be provided?
Yours, Ronnie
Hi Ronnie,
Contributions to retirement accounts won't affect the earnings test, which is based on gross labor earnings. As for business expenses, you need to keep records in case you are audited. Social Security is basing the earnings test, in the end analysis, based on your income tax return.
best, Larry