No. of Recommendations: 0
AJ, good responses, but you miss my point.

The business could be a "scam" and sell grass clippings for that matter. It could have "reported sales" of $50,000.00. The IRS or SS don't care. The wages paid out could be $49,999.00 for a net profit of $1.00, still they don't care. Now the OP has "earned income" of $49,999.00 and that would incure an additional $5,000.00 in income and SS taxes.

In this case where the OP was retired it might be more difficult depending on their previous earnings. But if a person was nearing retirement and knew in three to five years they were going to retire the last several years with hugh "inflated" wages might make a large difference. Larger than what the "extra" tax money would do if put in an IRA.

It might not apply to a person who worked under SS for their entire life but might for someone who started work later in life, a divorcee possibly.

Now what do you think? Workable?

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.