Page 69 - Book10E

1 . Your Paycheck . An amount, which is a predetermined percentage of your earnings, is deducted from your paycheck. Your employer matches this percentage and the total amount is paid to the Social Security Administration.
2 . If You Are Self-Employed . Any amount you earn above $400 a year must be reported and you must pay Social Security and Medicare tax on this amount in addition to your income tax.
3 . Military Service Personnel . If you served in active duty after 1957, you will have paid Social Security taxes on money earned for this duty and this money will be included in your Social Security record. For inactive duty, benefits also exist and differ depending on the time of service. For information, contact the Social Security office.
4 . Pensions and Annuities . Only earned income is subject to social security tax. Pension and annuity income is not considered earned income and therefore you do not have to pay social security tax on this income. The same is true for interest and dividend income.
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To get an estimate of what your Social Security benefits will look like in your present financial situation, use the calculator provided by the Social Security Administration at http://www.socialsecurity.gov/ planners/calculators.htm. You will need your Social Security number, date and place of birth, and mother’s maiden name to get a retirement estimate based on current law and your current earnings record. A number of benefits calculators are available at this website and can be very helpful to your retirement planning.
Social Security 59