Hello,

I have a small business and have not paid much into soc sec over the years (none in the last 3 years because I took no salary, dividends only, s-corp :) I am 53, and wish to begin taking a salary (like my CPA has told me for the last few years). My business has been doing better and made about 80k last year. My CPA said that I should take at least 1.5k per month. My wife works part-time making about 5k per year.

In your opinion, should I take a larger salary (2 to 3k per month) in order to increase or maximize my soc sec benefits at retirement?

Thanks!!!!!!!

JB

Hi JB,

The answer to your question depends on numerous different factors, such as your wife's age, her projected future benefit rate vs. your own, and how much you could increase your benefit rate with additional earnings. You and your wife should strongly consider using our software in order to determine your best plan for maximizing your benefits. The software allows you to input potential future years of earnings so that you can gauge the effect that they would have on your benefit options.

I should also add that both the IRS and Social Security require that you report earned income commensurate with the services you perform for your corporation (https://www.irs.gov/businesses/small-businesses-self-employed/s-corporat...). Avoiding Social Security taxes by falsely reporting your corporate earnings as unearned dividends could subject you to penalties or prosecution.

Best, Jerry