Among Friends

[Mom2Dogs]

Does anyone know if  Social Security is considered earned income?

Thanks.

[Apple Crisp]

No, it is not.

[mac116]

I do have taxes withheld from my SS checks.  Some of my friends do not use that option, and pay taxes on those benefits.  It depends on your total income as I understand it.  I certainly could be wrong...we have an accountant do our taxes.

[Mom2Dogs]

I ask because I usually take out an IRA but this year/2017...I will not have any earned income except social security mid year....business is in my husands name and I am not a paid employee.

[Tinkrbl44]

I think it also depends on your age.  If you retire early, it might be taxable income.   Check with your tax advisor.

[Apple Crisp]

Depending upon your income, you may have to pay taxes on a portion of your social security, but it is not considered earned income. When you file your income tax, social security benefits have a separate line on the tax form and the instructions explain how to determine how much, if any, tax you need to pay.

[Annabellethecat66]

Here it is for sure, no guessing:https://faq.ssa.gov/link/portal/34011/34019/article/3831/must-i-pay-taxes-on-social-security-benefit...

Must I pay taxes on Social Security benefits?

Some people who get Social Security must pay federal income taxes on their benefits. But, no one pays taxes on more than 85 percent of their Social Security benefits.

 You must pay taxes on your benefits if you file a federal tax return as an “individual” and your “combined income” exceeds $25,000. If you file a joint return, you must pay taxes if you and your spouse have “combined income” of more than $32,000. If you are married and file a separate return, you probably will have to pay taxes on your benefits.

See Benefits Planner: Income Taxes and Your Social Security Benefits for more information.

 NOTE: “Combined income” includes your adjusted gross income, tax-exempt interest income and half of your Social Security benefits.

I hope this helps.  I received $32,000 and it was for only part of the year because I waited til I was 70 to get it.

[Kachina624]

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income

[Annabellethecat66]

It's just crazy that anyone should have to pay taxes on any Social Security.  Our money is taxed to death.  It's just crazy!

[de1rdre]

Social Security benefits do not constitute earned income, and as such do not serve as the basis for making IRA contributions.  

They may or may not be taxable depending on the total amount of Social Security benefits and other income received during the year.