Earnings question while collecting Social Security Retirement

[WallaceCa]

North Carolina

Hi,
I am taking my social security retirement now under 66 and am allowed to make $17,040 ($1,420 per month) without a penalty.
I have a job 2 days a week where I make $660 a month but I also drive for Uber (I may gross $250 a weekend)
With Uber combined with my job my gross income may show me just a bit over the $1420 at $1660 but this is not all income. I pay for the gas tires and brakes.
With the IRS I am allowed to deduct actual costs of driving or .54 cents per mile which will put me well under the 1420.

For those curious I've been driving about 60 days and from what I see for a dollar earned I net about 50 cents.
5.88 net an hour weekdays (so I don't bother) but the weekends I can net 25 an hour on a great weekend and 11 on a real bad one, being in before 10 when the drunks leave the bars.

Do I have a problem? In other words, will they just see a quarterly report showing I took in something like 2000 and hold a check back?
Do I need to call them and explain this or do they wait to see my tax return?

Thanks

 

[FlyingRon]

It's based on the net. You are allowed to deduct the allowable expenses. Unless you're using the car exclusively for Uber, you have to apportion the maintenance, etc... appropriately.

 

[adjusterjack]

No, they don't hold back any checks, they adjust your benefit based on the excess earnings. The SSA will deduct $1 in benefits for every $2 you earn above the annual limit.

I have no idea how it gets reported or when it starts or how your mileage deduction affects it (might not).

I suggest you visit the SSA office and have a sit-down with a rep and get this explained to you based on your actual figures. Once you get past the sitting and waiting your turn, the reps are very helpful. Bring something to read.

 

[WallaceCa]

It's based on the net. You are allowed to deduct the allowable expenses. Unless you're using the car exclusively for Uber, you have to apportion the maintenance, etc... appropriately.

Thanks Ron.
I believe at this time I'm going to use the mileage deduction but that could change if I need a major repair. I keep a logbook of miles and it's about 80/20 uber vs personal.

Thanks
adjusterjack

My big concern is Uber submits a quarterly to Social Security, they assume its all income, and I am counting on a monthly check that never comes. I just have no idea how that works. I've written the Social Security but sometimes it take a long long time. May have to go in.

 

[LdiJ]

Thanks Ron.
I believe at this time I'm going to use the mileage deduction but that could change if I need a major repair. I keep a logbook of miles and it's about 80/20 uber vs personal.

Thanks
adjusterjack

My big concern is Uber submits a quarterly to Social Security, they assume its all income, and I am counting on a monthly check that never comes. I just have no idea how that works. I've written the Social Security but sometimes it take a long long time. May have to go in.

Why do you think that UBER is going to submit anything to Social Security? That would be very unusual.

 

[Janke]

As an Uber driver, you are self-employed. They will issue you a 1099 with the amount of money you have been paid. The 1099 data also gets reported to the IRS. Before 4/15/19, you will need to file a self-employment tax Schedule C and Schedule SE along with your tax return 1040. On there you will list your income and expenses to determine your profit and to determine how much you need to pay in FICA taxes. Your tax person knows how to do this. Tax software will also guide you through this. Once the tax return is filed, your net profit info will be sent to SSA and will show up on your earnings record. If that is over the $17,040 with the W2 earnings from the job, SSA will compute an overpayment and send you a letter.

Also, if the earnings from 2018 are higher (indexed for inflation) than earnings used in your retirement comp, then your retirement benefit may increase by a few dollars; if you had more than five zero years of wages between age 22 and when you retired.

 

[Janke]

Why do you think that UBER is going to submit anything to Social Security? That would be very unusual.

Uber will send a copy of the 1099 to the IRS who will be expecting you to include it as self-employment on your tax return. That is how SSA will find out. After next April 15.

 

[WallaceCa]

Why do you think that UBER is going to submit anything to Social Security? That would be very unusual.

I misspoke. I meant that Social Security would access an IRS quarterly report... The same way (I think) unemployment finds out if your working while collecting.

 

[Janke]

Uber is not withholding FICA from your income. That is because you are self-employed. But until your expenses are subtracted, the actual amount of your profit is unknown. That is why SSA bases their decisions on the tax return and it is YOUR job to file the tax return and determine what income taxes you might owe as well as how much Social Security tax you are going to owe. You are going to owe some Social Security tax if you had a profit. And if you don't have a profit, why would you be doing it? Your Uber business is not the same as being paid wages by an employee.

 

[WallaceCa]

Uber will send a copy of the 1099 to the IRS who will be expecting you to include it as self-employment on your tax return. That is how SSA will find out. After next April 15.

Thanks a lot. I've been using TurboTax Self-Employed Online for a few years now. Pretty good.

>>Also, if the earnings from 2018 are higher (indexed for inflation) than earnings used in your retirement comp, then your retirement benefit may increase by a few dollars; if you had more than five zero years of wages between age 22 and when you retired.

Thanks again. I was the non working house parent for 10 years so unfortunately 10 zeros. Sadly, I can't get 1/2 of ex's till I'm 75 when she turns 62 if even then as I took mine at 63.

 

[WallaceCa]

Uber is not withholding FICA from your income. That is because you are self-employed. But until your expenses are subtracted, the actual amount of your profit is unknown. That is why SSA bases their decisions on the tax return and it is YOUR job to file the tax return and determine what income taxes you might owe as well as how much Social Security tax you are going to owe. You are going to owe some Social Security tax if you had a profit. And if you don't have a profit, why would you be doing it? Your Uber business is not the same as being paid wages by an employee.

There is absolutely a profit just not much. Using the IRS 54 cents a mile about 50 cents of every dollar a bring in will be profit.

I guess with a major repair I could even show a loss using actual costs but I am aware after a few years of losses they frown on it..

 

[commentator]

I misspoke. I meant that Social Security would access an IRS quarterly report... The same way (I think) unemployment finds out if your working while collecting.

I think you may be thinking of something else that happens with unemployment insurance. The way they find out your are working somewhere while drawing unemployment benefits is because if you are working for a covered employer, that employer is paying in unemployment taxes, specifically to the unemployment system each quarter. To pay their required unemployment taxes to the state, not to the IRS, they report exactly how much you are making during the past quarter using your social security number. This system of all employers records, and the ss#'s of everyone who is drawing unemployment benefits is cross matched automatically with people drawing unemployment last quarter. This has nothing to do with the IRS. Then later on when you file taxes, the system cross checks with IRS reported incomes too.

They and Social Security also catch cheaters many times because someone who knows you and does not really have your best interests at heart will report you to unemployment and/or to Social Security on the anonymous fraud tip line. And then an investigation is done, just for fun. Which is why I like the suggestion that you work with the social security office and have them tell you exactly how to report your Uber earnings. I am sure you are not the first Social Security retirement recipient to work for Uber, or as a 1099 anywhere.

 

[HRZ]

Well each new quarter with counted wages wipes out a zero quarter and once at FRA you can earn unlimited amounts....some of my better quarters were well past FRA

 

[FlyingRon]

There's a special rule for being self employed while collecting SS retirement benefits if you are not yet of the full retirement age (68 or whatever).
If you are working for Uber while collecting social secuirty prior to the full retirement age, then it's not even a matter of how MUCH you make it's how MUCH time you spend working self employed. How old are you?

 

[WallaceCa]

62. I work 25 hours a week 15 at the job and 10 Uber