Social Security benefits timing

[Stan Brown]

Next year I'll start receiving Social Security benefits. They are
paid a month in arrears, so that the benefit for December 2019 will
actually be paid in January 2020.

If this were salary, that payment for December would be 2020 income,
not 2019 income. Is it the same for Social Security -- benefits are
income in the year when the payment is made available to me, not the
year for which it is paid?

(I know I'll find out the answer when I get a 1099 early in 2020. But
I like to estimate my tax in advance due as closely as possible, so
that I can have appropriate amounts withheld.)

[Paul S Person]

On Sat, 22 Dec 2018 07:51:03 -0500, Stan Brown

Post by Stan Brown
Next year I'll start receiving Social Security benefits. They are
paid a month in arrears, so that the benefit for December 2019 will
actually be paid in January 2020.

My records show that I received, in every month of 2012, $1,139.90,
from which $99.90 was removed for Medicare, leaving $1,040.00 for me.
The total was 12 x 1,139.90, or $13,678.80 paid. The SSA-1099 (which,
of course, looks like no other 1099 in the history of the world),
$13,678.80 for the benefits paid.

In 2011, in contrast, I got $1,000.00 per month until December, when I
started on Medicare, producing $985.00 for me and $115.40 for
Medicare.

Thus, in 2012, the SSA-1099 reported the income /paid/ in 2012,
regardless of what year it was "for".

If Medicare is your only deduction (that is, if you use something else
for withholding), SSA is surprising stable: what you get in January is
what you will get each and every month until December. And they send a
statement each year (well, provided something changes, at least) that
tells you what you will be getting the next year.

Of course, that's only half the story. The other half is figuring how
much of it is taxable. There, it is just you, your worksheet, your
calculator, and third-party websites. Or your tax preparer/software.

Welcome to the wonderful world of Social Security and (eventually if
not immediately) Medicare.

[Julian Bradfield]

I am having some difficulty working out why this is here....can
anybody explain?

[Paul S Person]

On Sat, 22 Dec 2018 19:34:03 +0000 (UTC), Julian Bradfield

Post by Julian Bradfield
I am having some difficulty working out why this is here....can
anybody explain?

He is one of the most senior of contributors. He can post pretty much
anything he likes.

Ironically, he also has me permanently killfiled, so he will never see
my response.

Which is, of course, /his/ loss, not mine.

[Stan Brown]

Post by Paul S Person
He is one of the most senior of contributors. He can post pretty much
anything he likes.

Senior in longevity perhaps, but I don't believe in special
privileges and am not claiming any. It was a stupid blunder, nothing
more or less, and I apologize.

[Stan Brown]

Post by Julian Bradfield
I am having some difficulty working out why this is here....can
anybody explain?

Because I'm a careless idiot. :-( My apologies for this -- I thought
I was posting to misc.taxes.moderated, but obviously not. By the time
I realized I hadn't got the auto-ack from the moderator, and figured
out why not, it was too late to cancel the wrong posting here.

I apologize for my blunder.

[Barry Schwarz]

On Sat, 22 Dec 2018 07:51:03 -0500, Stan Brown

Post by Stan Brown
Next year I'll start receiving Social Security benefits. They are
paid a month in arrears, so that the benefit for December 2019 will
actually be paid in January 2020.
If this were salary, that payment for December would be 2020 income,
not 2019 income. Is it the same for Social Security -- benefits are
income in the year when the payment is made available to me, not the
year for which it is paid?
(I know I'll find out the answer when I get a 1099 early in 2020. But
I like to estimate my tax in advance due as closely as possible, so
that I can have appropriate amounts withheld.)

If you use the cash accounting system (almost all individual US
taxpayers do), then it does not matter when you earn the money, only
the date it is paid to you.

I used to get paid every other Tuesday for the two week period ending
the previous Friday. So my paycheck dated 1/9/2018 would cover the
pay period 12/23/2017 to 1/5/2018. More than half that money was
earned in 2017 but I wouldn't be paid till 2018. It showed up on my
2019 W-2. Social Security is no different.

In olden times when checks were mailed, it was the date on the check,
not the date you received it or cashed it. So mail that was delayed
in the Christmas rush still counted for the previous year.

Nowadays, with almost everything direct deposit, it will be in your
bank account the same day the "check was written". There is
effectively no transfer lag.

So even if you are entitled to a December 2019 benefit, if you receive
it in January 2020 it will show up on your 2020 statement (SSA-1099).

I don't know how Inland Revenue dealt with Tolkien's income.

[Louis Epstein]

Post by Barry Schwarz
I don't know how Inland Revenue dealt with Tolkien's income.

According to Letters and his biography,he was retired from Oxford
on account of age in 1959 and took his pension as a lump sum that
he had managed for him...something like an American 401K/IRA.

He transferred his profit sharing entitlement on his copyrights
to his children a few years before his death in an effort to reduce
estate tax but did not outlive the transfer long enough to achieve
this benefit.

-=-=-
The World Trade Center towers MUST rise again,
at least as tall as before...or terror has triumphed.