Q: How would LLC income affect my Social Security benefit?
I am receiving Social Security retirement benefits. I have a rental property that nets about $4000.00 per year. If I put this property into an LLC (North Carolina), will I have to pay FICA? Will it affect the benefit I currently receive?
A:
Once you reach full retirement age, there is no limit on how much you can earn and still receive your Social Security retirement benefits without any reduction.
If you began receiving Social Security retirement benefits before your full retirement age, Social Security will deduct $1 in benefits for every $2 you earn above the annual limit. For 2021, that limit is $18,960. In the year you reach full retirement age, Social Security will deduct $1 in benefits for every $3 you earn above a different limit. In 2021, this limit on your earnings is $50,520. Social Security will only count your earnings up to the month before you reach your full retirement age, not your earnings for the entire year. Please refer to the SSA pamphlet about how work affects your benefits at https://www.ssa.gov/pubs/EN-05-10069.pdf.
With regard to FICA, if you remain actively self-employed and your annual net profit from your business is more than $400, you have to pay your share of Social Security and Medicare — as both employer and employee — via the Self-Employed Contributions Act (SECA) taxes on your Federal tax return.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
