|
Skip to content
 Show Can Rental Income Impact Your Social Security Retirement Benefits?Can Rental Income Impact Your Social Security Retirement Benefits?With life expectancy being longer today, it is not uncommon for people to spend 20 or more years in retirement – with much of that time being active and pursuing new opportunities. But if you’re receiving Social Security retirement benefits prior to reaching your “full retirement age,” other income streams could trigger taxes on this income. This, in turn, could reduce the net amount of income you have available to spend. If you qualify for Social Security retirement benefits, you can file for them as early as age 62. But if you start collecting before you have reached your full retirement age, the dollar amount will be permanently reduced. In addition, the amount you actually put in your pocket could be further diminished by taxes. In this case, by up to 85%. The taxable amount of these benefits depends on how much you earn from other sources, as well as the way you file your income tax return (i.e., as single, married filing jointly, married filing separately, or head of household). Social Security Full Retirement Age
Source: Social Security Administration There are a number of income sources that count as “earned income,” and that are considered when determining whether or not your Social Security benefits will be taxed. These include:
The good news is that rental income is not considered in this determination. If you’re unsure of how rental income may impact other areas of your financial life, it can help to have a property manager on board who is also a CPA. So, if you own residential rental property in or around the Central Florida area, <give us a call> to learn more about how we can help you! Photo by Kelly Sikkema on Unsplash Share This Story, Choose Your Platform!Related PostsWhile the majority of Americans elect to receive Social Security benefits prior to reaching full retirement at age 66, there's one thing that may dissuade you from doing so. Namely, your annual benefits will be reduced if you continue working and earn above $15,480 a year. The good news is that this only impacts so-called "earned income," which by definition excludes earnings from passive investments such as stocks and bonds, retirement plans, and real estate. Image source: Getty Images. With respect to real estate specifically, this means that unless you're a real estate broker or professional (in which case, proceeds therefrom would be considered earned income), then you have no reason to fear that rental income will weigh on your Social Security benefits. To learn more about this, check out the video below in which Motley Fool contributor John Maxfield answers a reader's question on the issue by delving deeper into the earned-income rule and its exceptions. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. What counts as earned income for Social Security?Wages include salaries, commissions, bonuses, severance pay, and any other special payments received because of your employment. (2) Wages paid in cash to uniformed service members. Wages paid in cash to uniformed service members include basic pay, some types of special pay, and some types of allowances.
What types of income does not affect Social Security benefits?Pension payments, annuities, and the interest or dividends from your savings and investments are not earnings for Social Security purposes. You may need to pay income tax, but you do not pay Social Security taxes.
|
Is rental income considered earned income for social security
Related Posts
Copyright © 2024 boxhindi Inc.
