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Can I Pay Back Social Security Taxes to Maintain Active Status?

In summary, Connie does not have enough quarters in the last 10 years to keep her social security active. She needs 20 quarters paid in during that time. She can go back and pay taxes for the last few years, but only up to 4 per year. Her CPA told her that she needs to have 40 quarters paid in to receive benefits. If she becomes disabled, she will need to have 20 quarters paid in over the last 10 years. She will also need to pay the
C
ConnieR
48
I just got my annual "social security" update today. While looking it over I noticed that because I have been doing PC (I'm a stay at home mom) and no other income for the last 7 years, that I do NOT have enough quarters in to keep me active with social security. It stated that I have to have 20 quarters paid in during the last 10 years. Can anyone tell me if I can go back and pay these taxes for the last few years, how far back I can go (if at all) and any other suggestions you may have so if in the future I should need the social security I will be in good standing to draw benefits!
 
That's odd. I'm looking at hubby's and it doesn't even go by quarters on anything.

Did you read the section about how the benefits are estimated? You get one credit for every $1000 of earnings, up to 4 per year. Most people need 40 credits over their working lifetime to receive benefits. I haven't worked, except for one 6 week period, in the past 10 years and I've never had a notice say anything like that. I would call and verify the information and ask them what you need to do. If they tell you that it's correct, you maybe wouldn't have to start repaying for prior years, just start with this year. On page 3, it tells you how much you should be paying. It also says they go by your earnings, not the amount of taxes you paid in, to determine your benefit amount so who knows what they'll say? Just a rough figure on the amount needed for the 40 credits, the SS and Medicare taxes would have been about $6200 combined.

Good luck.
 
What did your CPA say when you asked him/her?
 
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  • #4
ok, I need to clarify what I really mean (sometimes I think, but don't come across clearly). I do qualify for retirement SS, but if I should become disabled, I need 20 quarters in the last 10 years. I do not have an acct./CPA, but the person that does my taxes (a national firm) could not help me with this, so I did visit a SS Office and they did state that I have to have the 20 quartes in the last 10 years for DISABILITY. The amount that I have to make is $1050 in 2008 for 1 quarter. And this is "net income", so if I write all my tax deductions off, it usually comes below this amount. Also, I have to pay the 15% SS tax to them. When I had an hourly job, I paid 7.38 and my employer paid the difference.

After all of this, I am not sure if I can continue with PC, only very part time and get a part-time job that pays into SS, just in case!
 
This month I am getting disability insurance. PC is what I do for income (occasional side jobs to add in) and if I were injured, I'd be screwed. So I'm looking into it and it will cost me roughly $20 a month. Really looking forward to getting it for peace of mind.
 
Connie, you may want to consider doing what Colleen suggested. If you've never tried to get SS disability, it's a nightmare. People who cheat the system get it when those who need or deserve it don't. I was required to file for it (by my job in order to get their disability) after an auto accident. I knew I didn't really qualify but in order to keep getting my pay, I had to. My friend's daughter has unexplained seizures and SS turned her down flat. $20 a month is a very good rate, too. Hubby's costs $20 a week and that's through his job. (They rate it by salary) Another thing is how much would that qualify you for per month? SS doesn't pay that much even when you've worked and paid in forever. lol The yearly cost for the insurance wouldn't be that much and it may pay you a higher monthly income if something were to happen. Investigate your options before you decide to give up PC.
 
Start a 401K...at my age I figure I'll never get to collect SS anyway...
 
at my age I figure I'll never get to collect SS anyway...
Click to expand...

No doubt. If SS benefits drop in 9 years like it's projected, I'll have paid in for the past 33 years for nothing. I won't be close to retirement age by then.
 
janetupnorth said:
Start a 401K...at my age I figure I'll never get to collect SS anyway...
Click to expand...


I agree! And PC offers IRA options through Pampered Perks. That's where I have mine! :)
 
  • Thread starter
  • #10
Ladies: Thanks for the info. The disability ins. sounds like my option. Never thought of that!
 

Related to Can I Pay Back Social Security Taxes to Maintain Active Status?

1. What is the difference between tax and social security?

Tax refers to the money individuals or businesses pay to the government based on their income, property, or sales. Social security refers to a federal program that provides financial support to retired, disabled, or unemployed individuals and their families.

2. How is social security funded?

Social security is funded through a combination of payroll taxes from employees and employers, income taxes on social security benefits, and interest on the trust fund.

3. Do I have to pay taxes on my social security benefits?

This depends on your total income and filing status. If your combined income (adjusted gross income + nontaxable interest + half of your social security benefits) exceeds a certain threshold, a portion of your social security benefits may be subject to federal income taxes.

4. Can I collect both social security benefits and a pension?

Yes, you can collect both social security benefits and a pension. However, if you are also receiving a government pension, your social security benefits may be reduced due to the Windfall Elimination Provision.

5. How do I report changes in my income or employment status to the Social Security Administration?

You can report changes in your income or employment status to the Social Security Administration by logging into your "my Social Security" account online, by calling their toll-free number, or by visiting your local Social Security office.

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