Is the Earned Income Limit in Social Security the Same for Individuals and Married Couples?

by Rod Howell

    You are entitled to receive Social Security Disability, Survivors or Retirement benefits and work at the same time. Whether married or single, earned income affects your benefits if the amounts are over certain limits. The Internal Revenue Service has different ways of treating earned income for individuals and married couples depending on the type of benefits involved.

    If you're younger than your full retirement age and receiving Social Security Retirement or Survivors benefits, you must earn under a certain amount annually to avoid a reduction in your benefits whether you're married or not. Full retirement age is determined by year of birth; if you’re born between 1943 and 1954, for example, your retirement age is 66. As of 2012, you can earn up to $14,640 annually without a reduction in your benefits. Every $2 earned over this limit reduces your benefits by $1. During the year you reach retirement age, in the months preceding your birthday you can make up $38,880. Your benefits are reduced $1 for every $3 you earn over this limit.

    If you’re single or married, you can make up to $1,010 per month before there's a reduction or stoppage of your Social Security disability benefits.You can earn up to $1,690 per month without a reduction to your benefits if you have low vision or are legally blind. Your earnings limit may be increased by the amount of any work expenses you pay. If you’re 55 and legally blind, you can make over $1,690 per month and keep your eligibility, but won’t receive a disability payment. If your income falls below $1,690 in any month, you will receive a full benefit check. This only applies to you if your current job requires less skill than the one you had before your vision problems.

    Social Security benefits are generally not considered taxable compensation. However, if you’re working or have other taxable income such as interest income, your benefits are taxed at normal tax rates. There are different limits for individuals and married couples. For example, if you’re single and have over $25,000 in income, the IRS taxes 50 percent of your Social Security benefits. If your income tops $34,000, up to 85 percent of your benefits are taxed. Up to 50 percent of your benefits are taxed if you’re married and the combined household income exceeds $32,000. Up to 85 percent is taxed if the incomes surpass $44,000. Filing separately when married will likely result in taxation of your benefits.

    To qualify for Social Security benefits, you have to pay Social Security taxes. There is a limit to how much you pay in Social Security taxes annually. This is called the maximum taxable earnings limit and it’s based on your individual income, not the combined incomes if you’re married. No Social Security taxes are taken out of earnings that surpass this ceiling. As of 2012, the maximum taxable earnings limit is $110,100, up from $106,800 in 2011.

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    About the Author

    Rod Howell is a writer living in Charlotte, N.C. He graduated from Thaddeus Stevens College with an associate degree in administration in 2000. He published the book "Capitol Conspiracy" and regularly contributes to a blog as well as various other websites, drawing frequently from his experience as an insurance agent.

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