Earnings & Taxes during Retirement
This is my 3rd run of ESPlanner since I retired June 1, 2013. Last year, and this year 2016, I have done a bit of consulting.
1) Am I correct to put that Income on the Earnings page under Self Employment Earnings after setting the retirement age to 1/1/2016?
2) Will the program then treat me as retired for the entire 2016?
3) With this self-employed earnings as my only source of income, other than my pensions, Social Security and RMDs from my IRA accounts, my tax accountant has advised that I am eligible to deduct from my Federal Taxes the Medicare deduction taken from my Social Security. Does ESPlanner program account for that? If not, how do I account for this?
Sun, 06/05/2016 - 16:41
Since I assume you have to
Since I assume you have to pay the full payroll tax on these earnings (i.e., both halves of the FICA) you would enter it as self-employement earnings yes. But then do not copy it forward in the Social Security future earnings grid since these earnings are not from SS wages.
Your retirement year will then be 2017 I believe since you are working at least part of 2016.
I'd have to look up or ask our tax guy about the third question. My guess is that ESPlanner will account for that deduction. I'll see what I can learn or perhaps a test or two could determine by looking at the Fed Filer Worksheet in the PDF.