topic Social Security Retirement Income & LLC Business Profits in Self employed

Social Security Retirement Income & LLC Business Profits

ICI bloominton — Wed, 27 Oct 2021 16:45:21 GMT

I'm collecting SSI Retirement Income and own a brick and mortar business i.e. flower shop.

Last year for 2020, I paid myself as a W-2 wage earner $16,150. The business made on Schedule 1, Line 3

$ 29,435. Social Security Administration added the business income to my personal income W-2 and states they overpaid SSI Retirement Income by $9000 +. SSA states this is an Overpayment.

This profit is working capital for the business, it was not taken out of the business.

Do I owe this back to SSA or did they error in asking for an overpayment.

Re: Social Security Retirement Income & LLC Business Profits

OpeA1 — Wed, 27 Oct 2021 17:37:10 GMT

The SSA deals with overpayment is several different ways. Please find more information in the link to the SSA following. https://www.ssa.gov/ssi/text-overpay-ussi.htm

Here are the various ways they state to deal with overpayments:

"WHAT WILL WE DO IF THERE IS AN OVERPAYMENT?

We will send you a notice explaining the overpayment and asking for a full refund within 30 days. If you are currently getting payments and you do not make a full refund, the notice will:

propose to withhold the overpayment at the rate of the lesser of 10 percent or the entire monthly payment;
state the month the proposed withholding will start;
fully explain your appeal rights;
explain how you can ask us to review and waive the overpayment, so you may not have to pay it back; and
explain how you can appeal our decision."

Re: Social Security Retirement Income & LLC Business Profits

ICI bloominton — Wed, 27 Oct 2021 18:27:56 GMT

You didn’t answer the question. I don’t need help in figuring out how to pay it. I have already made an appeal and it is in Review Status. What is your opinion, do I owe it?

Re: Social Security Retirement Income & LLC Business Profits

Donna F 77 — Wed, 27 Oct 2021 18:33:25 GMT

When you say you paid yourself as a W-2 wage earner, there is some confusion. A sole proprietor cannot pay themselves W-2 wages.
In regards to the business income flowing to your Schedule 1 from Schedule C, it is definitely income to you and should be included as income for purposes of the SSA calculating your benefits.