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Can't work and collect Social Security

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Maxxgold
  10/30/2014 15:36 EST

In my research for next year I found something about losing SS payments. I realize there is a cap on how much you can earn if you are not at full retirement age but this says you can't earn almost anything if you live outside the US. True?

http://www.ssa.gov/pubs/EN-05-10137.pdf

On page 16 and 17

"The foreign work test:

We withhold benefits for each month a beneficiary younger than full retirement age works more than 45 hours outside the United States in employment or self-employment not subject to U.S. Social Security taxes. It does not matter how much you earned or how many hours you worked each day.
We consider a person to be working any day he or she:
• Works as an employee or self-employed person;
• Has an agreement to work even if the person does not actually work because of sickness, vacation, etc.; or
• Is the owner or part owner of
a trade or business, even if the person does not actually work in the trade or business, or the person does not make any income from it."

OceanHideaway
  10/30/2014 18:50 EST

You will want to contact a Social Security attorney to see how the law applies to you and your situation.

Every situation is different and case law will define if and how this applies to you.

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Maxxgold
  10/30/2014 20:20 EST

Thank you Susan.

Maxxgold
  10/31/2014 05:17 EST

Yes, each person has different circumstances and conditions. It is never a good idea to assume anything in regard to dealings with the US Government. For example if I retire at age 62 this coming spring I will be getting about $1,650 a month in SS. From what I understand I can make up to $1,200 a month in additional income without having deductions taken out of my SS. A year later this amount is raised every year until I reach full retirement age then there is no limits (Of course I have to file 1040s and pay the taxes on it no matter where I live).

Now my understanding is that these conditions may not apply if I live outside of America. They may be even more restrictive and possibly prohibit employment entirely.

BTW the "$1,200" quote I got was from someone who gets $1,200 a month in SS. My SS monthly is about $1,650 because I paid the maximum amount for many years. Possibly I may be given a higher threshold for earning.

Does anyone here have experience or knowledge of the limitations of work in regard to SS? Particularly for those who haven't reached full retirement age?

Thanks.

nanblake
  10/31/2014 14:28 EST

I can only make $15,500/yr from SS. collecting @ 62yrs

Maxxgold
  10/31/2014 15:13 EST

Thank you nanblake. Is this amount applicable for work outside the US?

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nanblake
  11/1/2014 09:49 EST

maxxgold, not sure about work outside usa?

gyuris
  11/24/2014 05:41 EST

Here is what the SSA handbook says:

Section 811 - Work Outside the U.S.


* If you are under age 70 and work in a foreign country for 45 hours in any one month your benefit is suspended for that month, unless the work is covered by U.S. social security tax. It doesnt matter how much your earnings are, even if the totals for the year or month are under the regular limits (Sections 801-802.3). Disability benefits are not subject to this rule. Benefits for any dependent on your account are also suspended, with three exceptions: a divorced spouse, divorced for at least 2 years; if the worker was deported, if the worker is an alien whose benefits are suspended due to the alien non-payment of benefits law. This law prohibits payments, including disability benefits, to aliens who reside out of the country for more than 6 months. *


You can find all about Social Security: Payments While You Are Outside The United States -
See more at: http://corporate.findlaw.com/law-library/social-security-your-payments-while-you-are-outside-the-united.html#sthash.6vEFYvkM.dpuf

Click on the link above.

A.T.
++++++

banjomaniac
  12/5/2014 18:00 EST

I cant say for sure if you can collect BUT it is a shame the U.S. Government forces you to pay this so called S.S. but in the end they can just keep it. It's your money they took out of your paycheck, you should get it ALL back. what a scam. Other than working my whole life starting at 17 I can't figure out why it seems like they are punishing the working class which is exactly why I'm looking at moving outside the U.S.

remoore2001
  12/6/2014 00:01 EST

Who cares it's the rules. Move and quit your bitchin

MrBill1955
  12/20/2014 07:50 EST

How will they know you are working in Ecuador if you don't tell them?

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Maxxgold
  12/20/2014 14:05 EST

"How will they know you are working in Ecuador if you don't tell them?"

The IRS and the US Government is working on a worldwide reporting requirement for all foreign governments. The idea is each country will cooperate with each other so they can collect income taxes on their citizens world wide.

Also if you (US citizens) do not report your income made overseas you are guilty tax evasion, which is very serous crime. Some countries like those in the EU have a deal worked out where you do not have to be double taxed. First by the resident country and second by the US/IRS. Poland is an example of a country that levies a type of Social Security tax on American expats living there. The US government recognizes this and does not impose their tax on US Expats. However if you live in certain other countries you have to pay 15.3% S.S. tax to the IRS and whatever the resident country imposes for their retirement tax. Of course all the other taxes from the IRS and the resident country are to be imposed as well. Hence double taxation.

I noticed the only country in South America that has deal worked out with IRS is Chile. http://www.ssa.gov/international/countrylist3.htm

"Your payments will continue even if you have been outside the U.S. for more than six full calendar months, if you are a resident of a country with which the U.S. has a Social Security agreement. Currently, these countries are:

Australia France Netherlands
Austria Germany Norway
Belgium Greece Poland
Canada Ireland Portugal
Chile Italy Spain
Czech Republic Japan Sweden
Denmark Korea (South) Switzerland
Finland Luxembourg United Kingdom

iguanab1
  12/20/2014 14:10 EST

Remember, if you make a small amount (I do not remember the limit), you are not required to submit an IRS report - or at least this holds true for working domestically. You might want to find out of the same holds true for living abroad.

Good luck!

casadecuenca
  12/20/2014 14:17 EST

Approximately 50-60% of the economy in Ecuador is underground. While it is a 95% Catholic country, you do not have to go to confession.

Maxxgold
  12/20/2014 14:48 EST

I wonder if many here do not know the rules and are flying by the seat of their pants in regard to this issue?

This issue in another way came known to me by the recent happening to a niece of mine. She had been collecting about $750 a month in SSI. She got the opportunity to do some State paid work caring for her grandmother (my mother). She worked 2 years and few months getting about $625 a month net. All taxes federal and state were deducted.

Then SSI got wind of this and told her that they hadn't got their cut (About 50%). Now she owes SSI over $6000. Her meager $750 month is gong to be cut about $225 month for years to come to pay for this and the interest.

Anyway I just don't want something similar to happen to me.

gyuris
  12/21/2014 07:28 EST

In Ecuador specifically, there is no double taxation.

You don't pay Ecuadorian SRI taxes on your US SS income or any money transfers from your US accounts into Ec.

A.T.
++++++++

EcuadorDean
  12/29/2014 08:14 EST

Well I guess if you are naive (re:stupid) enough to report it you should pay taxes! You should really question your motives for needing to work in a foreign country after retirement... Get a life!

Maxxgold
  12/29/2014 12:16 EST

Reporting your status is required to stay within the law. An intelligent person knows that risking his or her passport and a steady stream of non-taxable income, Social Security to avoid some taxes is stupid in itself.

The "need" is not the additional money although that is nice, it is the desire to have something productive to do.

My God there is a lot disturbed expats out there! I'll make a note to be on the guard.

EcuadorDean
  12/29/2014 18:34 EST

Yes and the most disturbed ones are those who can't bear the thought of being without a gun...
Stay in the USA please!

Maxxgold
  12/29/2014 21:42 EST

Oh my double barrel sawed off shotgun joke came back to bite me. Oh my!

jaymo
  1/2/2015 12:21 EST

I can't say I'm surprised by the people who urge ethical lapse for the sake of a fistful of dollars. I hope to not be in that situation.

However, I do understand the position of those same people if they have found it nigh impossible to deal with the US on income reporting, asset reporting, and found that the people on the US Gov't side will offer conflicting and contradictory information, if they are able to answer the question at all.

I speak as a US citizen and full time resident who has a son living and working in a foreign land. He earns far less than the income tax threshold, which is somewhere in the $95 thousand range per year. However, they still want you to report. Then they make it nearly impossible to do so.

I have been talking to IRS agencies and agents, to tax lawyers, and on and on. The boy wants to be a good US citizen, but is stymied at every turn. He has taken the point of view that since he is under the dollar threshold, he won't bust his butt until they are more cooperative.

The big hole that he is staring at, in my opinion, is that his resident country does not offer (nor do they deduct) a comparable SS scheme for retirees, and if he ever returns here, his residence will likely be in S. Creek, without a paddle.

Maxxgold
  1/2/2015 13:27 EST

Interesting post jaymo. A person needs a series of current 1040 forms filed in order to get certain things done here in the US. Buying a home is an example and possibly getting care at a hospital now that we have Obamacare. How about passport renewal? Now if you are collecting SS and not working you do not have to file. However the IRS can audit you back 3 years from the LAST tax return you filed (So many rules it is impossible to know them all) and you MUST report your foreign bank accounts to the Department of Treasury or face a $10,000 fine.

jmason26
  1/2/2015 13:34 EST

I think there is a minium threshold for reporting foreign bank accounts. If you have less than $10,000 in a foreign account I don't think that is reportable.

I don't know if the $10,000 threshold is for each account or the total of all foreign accounts, or whether you have to include any LLC or corporate accounts in the calculation and reporting.

Anybody know what the rules are on this?

Maxxgold
  1/2/2015 14:27 EST

My understanding the reporting requirement is for a accumulative amount of $10K per year. So a deposit of $833.34 a month or more for a year would qualify for the reporting requirement.

As far as having multiple bank accounts to get around that I think those count in the accumulative amount BUT I am not certain of that. I wouldn't think they could be that lax in leaving such a loophole but who knows as we are talking about the efficiency of government here.

jaymo
  1/2/2015 21:50 EST

Thanks for the info, Maxxgold. I'm not sure my son will ever move back to the US. He married a woman in his adopted country and he has their equivalent of a green card. I'm sure passport renewal is something he should be concerned about. He's probably got about 5 years before it becomes a crisis, which is when he usually acts.

Maxxgold
  1/2/2015 23:05 EST

Hopefully he can get citizenship in his wife's country. If he doesn't need the US then he is set. There is a lot of good articles about Americans living outside the US here: http://www.nestmann.com and http://www.internationalman.com

gyuris
  1/3/2015 00:48 EST

Maxxgold. The FBAR reporting requirement is not accumulative. It says clearly in the law, : it is when the total amount of all your foreign accounts excedds the $10k at any one time during the tax year.
Just reaf the law for yourself.

A.T.
+++++

Maxxgold
  1/16/2015 12:41 EST

" If you have an aggregate of $10,000 or more in foreign financial accounts at any time during the year, you must file an FBAR (FinCEN Form 114). A foreign financial account is an all-encompassing term. It includes non-US bank and brokerage accounts, as well as foreign mutual funds, accounts with gold storage companies like GoldMoney, and much more.


Also worth mentioning is that foreign real estate and physical gold held in a foreign safe deposit box are not considered financial accounts and are not reportable if they are held directly in your name and not that of a trust, LLC, or other structure.
.

The $10,000 threshold refers to the total of all your foreign financial accounts. So if on any given day during the year you had, for example, the equivalent of $9,000 in a Singapore bank account and $1,100 in a Hong Kong brokerage account, you would need to file an FBAR. "

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