No. of Recommendations: 2
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.

Ummmmmm......the IRS and SSA do care. Unless you have an actual business and can show actual revenues and expenses, it's called fraud.

Of course, spending one's retirement in the pokey could be cheaper from a living expense standpoint, but your net worth would probably take a hit from fines and penalties.

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