Q & A
How do I reconcile my earnings history correctly when comparing tax returns against the Social Security statements?
Full question: I understand that Social Security reviews your highest 35 years of earnings in determining your benefit at retirement. But what does Social Security consider “earnings” for the purpose of determining these benefits? I have most of my tax returns from the past 35 years and have tried to compare my tax returns with the earnings that Social Security has credited me for each year and cannot reconcile any of the numbers. How do I reconcile my earnings history correctly when comparing tax returns against the Social Security statements?
Answer: Your Social Security earnings are different from your taxable income. First, the Social Security Administration only counts earned income from employment (wages) or self-employment (net earnings). Second, there could be discrepancies if income is counted when earned vs. when paid. By the way, if the Social Security record is just plain wrong, it can be corrected. Read more…
Source: Robert Powell, Retirement Weekly via www.usatoday.com
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