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Fri
11
Apr '14

Combination Impairments

Madagascar

Who knew that Ifaty Beach would be so sunny? I’m in Toliara, Madagascar enjoying some rays on one of the many beautiful beaches in this amazing country. But, as is customary, I’m taking a break to answer your questions.

Dear Ben,

I’ve had problems with arthritis for a few years. I’ve been taking medications that used to make working fulltime possible. Then several months ago, I had to leave my job for several reasons. The pain made it harder to do my job, and the pressure of trying to do my work started to make me tense and moody, and I just couldn’t concentrate and was confused at times. I took a lot of sick days and finally had to leave. I’m to the point where I don’t even want to go out anymore.

I’ve heard that arthritis is not enough to get Social Security disability, so I doubt I would be approved if I apply. What do you think?

Morgan,
Upson, WI

Dear Morgan,

Based on what you said, you should contact SSA and apply for disability benefits.

Even if you don’t qualify for disability based on your arthritis alone, SSA may still find you disabled. Often when a person has a single severe medical condition, SSA will find the person disabled based on that one impairment. But a person may also qualify for disability benefits based on a combination of disabling medical conditions. SSA considers how the combined effects of all impairments limit a person’s ability to work and if these limitations have lasted or are expected to last for a continuous period of at least 12 months.

So when you apply, you need to provide in detail, all information about any impairment you have that limits your ability to work; this includes both physical (your arthritis) and mental problems, such as the ones that you mentioned. SSA will then consider these as indications of possible impairments that may be viewed in combination.

If there is not enough medical information about your conditions from any treating physicians and psychologists you have, SSA may ask you to have what is called a Consultative Examination. SSA will pay for the exam, which is for evaluation only and not treatment.

In closing, the beaches in Madagascar are virtually untouched by mass tourism. That gives me more freedom to discover the coral reefs and clear turquoise waters.

Stay connected to see where I’ll be traveling next, Ben

Wed
26
Mar '14

Taxes and Benefits

Venice of the East - image of Bangkok, Thailand at sunset overlooking a river bathed in golden light.

Hi Everyone,
I received the following question that seemed very timely to tax season as the sun sets here in Bangkok. What a beautiful sunset it is. I can see why they call this city the Venice of the East. Thanks for sending your questions my way.

Dear Ben,

I started getting SSDI benefits at the beginning of last year (2013) of around $1,200 per month and also a private pension of $600 per month. I am not married and don’t work. Someone told me that people who get social security benefits have to pay taxes on them; I thought SSA benefits weren’t taxed. Are they, and will I need to pay taxes on mine?

Barbara
Ino, WI

Dear Barbara,

Title II Social Security benefits (which include SSDI) may be taxed depending on how much a beneficiary’s total income is.

The general rule is that if one-half of a single person’s Social Security benefits plus all other income is greater than $25,000 annually, some of the benefits will be subject to federal personal income tax. For a married couple filing jointly, the base amount of income is $32,000. If an individual beneficiary’s total income is between $25,000 and $34,000 ($32,000 and $44,000 for a couple), up to 50 percent of the benefits may be subject to tax. And for beneficiaries with income of more than $34,000 ($44,000 for a couple), up to 85 percent of their benefits may be considered taxable income.

Income that counts toward these base amounts other than Social Security benefits includes wages, net self-employment earnings, interest, other pension benefits, withdrawals from 401(k) and IRA accounts, and other tax-exempt interest.

It appears that your adjusted gross income plus one-half your Social Security benefits will not exceed the $25,000 threshold, so federal taxes would not be due.

Also note that Supplemental Security Income (SSI) payments are not subject to taxes.

IRS Publication 915 has extensive and detailed information about benefits subject to income tax and examples of how to complete the appropriate worksheets are included with the IRS forms. http://www.irs.gov/pub/irs-pdf/p915.pdf

Ben

Tue
25
Mar '14

Immediate Payments of Social Security

Floating Market, Bangkok, Thailand

As you know, I am always on the go, and today you will find me in Bangkok, Thailand. I’m in tourist mode discovering the floating markets. It is here where one can purchase fresh fruits, vegetables, and flowers, in addition to tasty foods made right on the wooden boats. I’m going to eat my coconut pancakes as I catch up on my blog.

Dear Ben,

I get SSI and have the payment sent directly to my bank every month. Today (the 2nd of the month) I discovered that this month’s check was not deposited; it looks like there was some kind of mix up with my account at the bank which I transferred to recently. I need the money from that check to pay my expenses and don’t have much in my account. What can I do?

Lola, Spirit, WI

Hi Lola,

You should contact your local Social Security Administration (SSA) field office for them to check the status of your payment. In critical situations when an SSI recipient’s payment is delayed, interrupted, or not received, a local SSA office may be able to make a special direct payment to the recipient.

SSA can make what is called an Immediate Payment (IP) when a Supplemental Security Income (SSI) recipient has a financial emergency and does not receive a payment that is due. An emergency exists when a person needs money right away because of a threat to health or safety, such as not enough money for food, clothing, shelter or medical care. The local SSA office writes out a paper check to be cashed.

An IP is not additional money but rather an advance against future SSI payments. Once a recipient’s regular payment is received, SSA will recover the IP amount from the recipient’s next SSI payment. The maximum amount payable is the total amount of payment(s) due or $999, whichever is less. SSA has limits on the number of IP payments a recipient can receive: just one may be made every 30 days regardless of the amount paid. (POMS SI 02004)

Similar to an IP is an SSI Emergency Advance Payment (EAP) which is used only in initial claim situations and has similar requirements as the IP. A person must be eligible for SSI, have a financial emergency, and have received no SSI payment yet. Normally the maximum amount is the Federal Benefit Rate (FBR) which is $721 in 2014.

SSA also has Immediate Payments under the Title II program (which includes SSDI). A beneficiary must be entitled to a benefit, not have received a regular due payment and have an immediate financial need for payment (i.e., for food, shelter, medical treatment, etc.) that cannot reasonably be met through other resources available in the community. (POMS RS 02801.010)

I’ll wrap up this blog, as the smell of fresh cooked seafood is calling me. I hear the mackerel fried rice is a local favorite.

Ben

Tue
25
Feb '14

Technology Expenses and Income Related Work Expenses (IRWEs)

Photo of Ben in front of Lapu Lapu

Heading North on my travels, I decided to stop on Mactan Island in the Philippines to admire the statue of Lapu Lapu. Fortunately, I found an internet cafe nearby to check for questions.

Dear Ben,

I’ve been getting SSDI for over four years now and my benefit is about $1,100. Last year I started working at a job from home. I started out earning around $500 gross a month and went up to $800 after a few months. I let SSA (Social Security Administration) know about my work and how much I earn, and I have been keeping track of my earnings. I have used all nine of my trial work period months, but have not reached the Substantial Gainful Activity (SGA) level of earnings yet ($1,070 this year, 2014).

I will soon have the opportunity to increase my earnings to around $1,200 or more a month. Given my disability and the kind and amount of work that the company requires to earn that higher amount, I’ll need to buy some special software, a couple pieces of hardware, and a better and more expensive data connection for my computer. I’m willing to do this even though it’ll be costly and I’ll have to pay for all of it myself over time. But, I’m hesitant about going ahead since it means my benefits would stop a couple of months after I earn that much. Any ideas about what I can do?

Jill, Browntown, WI

Hi Jill,

The costs you have for the special computer equipment that you need may possibly qualify as Impairment Related Work Expenses (IRWE). This means that SSA would subtract the costs from your gross earnings when you reach the SGA level. For example, if in any month you pay $150 for those items and services and your gross wages are $1,200, SSA will subtract $150 from $1,200 and count just $1,050 as your earned income, which is below the current SGA level of $1,070. Since you have not earned SGA yet, your benefits will not be ceased as long as your countable earnings stay below SGA. For a beneficiary whose benefits have already ceased due to SGA and who is in the 36 month Extended Period of Eligibility (EPE), a benefit would be payable in any month with countable earnings below SGA.

To qualify as an IRWE the cost of an item or a service must be needed to enable a beneficiary to work, must be directly related to the beneficiary’s impairment, be paid for by the beneficiary (not reimbursed), and be reasonable (the standard charge in the community).

Normally an IRWE is used to offset the earnings in the month in which the expense has incurred; however, if a beneficiary makes one large payment, SSA may allow the IRWE deduction to be spread out over 12 months. If money is borrowed for a purchase (loan or credit card), SSA will deduct the actual payment made each month as an IRWE. SSA determines what expenses can be deducted after they are incurred based on the evidence and documentation provided by the beneficiary although prior consultation with an SSA representative is an option. (POMS DI 10520.001)

Here is a link to information about IRWEs on the SSA internet site: http://www.socialsecurity.gov/redbook/eng/ssdi-and-ssi-employments-supports.htm#a0=2

You may also contact a Community Work Incentives Coordinator (CWIC) who can answer questions about and may assist you with IRWEs through the Work Incentives Planning and Assistance (WIPA) program: http://www.socialsecurity.gov/work/WIPA.html

Ben

Mon
27
Jan '14

Debt and Social Security Benefits

Photo of Lake Hawea

Dear Ben,

I get SSDI. I have accumulated some debt and am afraid that the money I owe will be collected by having some or all of my Social Security benefits taken away. Is that possible? Also, I was wondering if I declare bankruptcy, would my benefits be part of my property that could be given to my creditors?

Sid
Ashwaubenon, WI

Kia Ora everyone!

After leaving Australia I have decided to go south to New Zealand to enjoy the refreshing waters of Lake Hawea. I’m happy to answer your question Sid.

Social Security Disability Insurance (SSDI) benefits are in most cases protected from debt collection. However, certain important exceptions apply when money is owed to a third party (that is, not the Social Security Administration). This money can be withheld from a person’s SSDI benefits. When this exception is possible depends on the type of debt. Following are some types of debt and how an individual’s SSDI benefit may or may not be protected.

Note: Supplemental Security Income (SSI) cannot be collected to pay debt to third parties, even in the exceptional situations listed here for SSDI.

Garnishment

One type of debt collection commonly used is garnishment. Garnishment is the direct collection of a specified sum of money from a person’s wages or other regular income.

Garnishment cannot occur in most situations for SSDI. It is allowed from Title II benefits (which includes SSDI) in order to enforce child support or alimony obligations. Social Security is required to honor a garnishment order authorized by a state court for the collection of such debt. (POMS GN 02410.200)

Internal Revenue Service (IRS) Levy

Another type of debt collection process that can be applied to SSDI benefits is the Internal Revenue Service (IRS) levy. The IRS levy is used to collect unpaid federal taxes from benefits.

The IRS may exclude a limited amount of a delinquent taxpayer’s total income from the levy so that the person is not deprived of subsistence income. This is a decision that the IRS makes and not Social Security. (POMS GN 02410.100)

Benefit Payment Offset (BPO) Program

Similar to the IRS levy is the Benefit Payment Offset (BPO) program. This program is used to collect money owed to federal agencies other than IRS. Federal agencies are required to collect delinquent non-tax debts owed to the federal government from benefits they pay. This would include certain types of student loans and home loans.

Under BPO, SSDI benefits cannot be reduced below $750 per month, so delinquent debtors will still receive at least that much per month. Also, no more than 15% of a person’s total benefits can be withheld. Relief from BPO due to hardship is possible and has to be requested from the creditor agency and not Social Security. (POMS GN 02410.300)

Bankruptcy

Bankruptcy is one way of resolving debt that can be complicated and requires the assistance of legal counsel. Regardless, SSDI benefits paid after the filing of bankruptcy are exempt from the property distributed to creditors to resolve debt in the bankruptcy process. (POMS GN 02410.005)

Social Security Overpayments

Also note that this discussion has been about money owed someone other than Social Security; money owed Social Security due to benefit overpayments can potentially be withheld from SSDI or SSI payments.

I hope this general information has helped you, but consulting with a credit or debt counselor or other qualified professional about your situation is recommended.

Cheers, Ben

Fri
17
Jan '14

Hanging with Kangaroos: Trusts

Hanging with Kangaroos in Australia

Greetings from a Kangaroo Sanctuary in Alice Springs, Central Australia…Yesterday, I got to meet an animal I find fascinating, the kangaroo. I spent the day at the Kangaroo Sanctuary since these marsupials are very timid and can be difficult to see up close in the outback. I also answered a question I get from time to time about Trusts.

Dear Ben,
I am the representative payee for my son who is 24 and gets SSI. My elderly aunt is revising her will and wants to leave my son several thousand dollars. I know that if he receives money it would probably make a difference for his SSI eligibility and payments. I heard that my aunt might be able to set up my son’s inheritance in a trust so that his SSI would not stop or maybe not change. What are the possibilities for a trust in my son’s situation?

Gena
Cambria, WI

Hi Gena,
You are correct in saying that income from an inheritance can have an impact on a Supplemental Security Income (SSI) recipient’s eligibility and payments. Normally, money from an inheritance counts as income for SSI the month it is received and, if kept, becomes a resource the next month.

What is a Trust?
A trust is a legal arrangement in which assets are held for and disbursed to an individual (a beneficiary) by someone else (a trustee) who can be a person or a financial institution and who manages those assets. Disbursements from the assets are set out in the trust document and can take various forms, including cash. Trustees normally charge fees.

Setting Up Trusts
A trust is a possibility in your situation, but be aware that trusts can be complicated, especially as they apply to public benefits such as SSI. Trust laws also differ from state to state and are subject to change. To plan and establish one you should consult an attorney, a financial advisor, or other professional with expertise in trusts. However, I can give some of the basic information and relevant SSI rules.

How Do Trusts Work with SSI Payments?
The critical SSI issues are if the assets in the trust are a countable resource and if any disbursements are countable income.

There are various types of trusts and depending on the type, the trust assets may or may not be considered a resource for SSI, and any disbursements from the trust may or may not be counted as income for SSI. In some cases, specialized Social Security Administration (SSA) staff has to review a trust to determine if or how it affects SSI eligibility or payments. (POMS SI 01120.200)

Trusts Set-Up and Funded by Third Parties
Trusts set up and funded by a third party normally will not count as a resource for SSI if the beneficiary does not have the legal authority to revoke, terminate, or direct the use of the trust assets for his or her support and maintenance. This may be the type of trust appropriate in your son’s situation – a testamentary trust:

- one established by a will effective at the time of death,
- the assets of which would never belong to your son.

Trusts Established with Assets of the Individual with a Disability
Trusts established with the assets of the disabled individual (or spouse) are normally considered a resource for SSI with certain exceptions, an example being irrevocable trusts with specific restrictions on use (as discussed later).

If a trust is excluded as a resource for SSI, disbursements to the beneficiary may still be counted as income for SSI depending on their nature; SSA would apply the regular SSI rules regarding countable income. For example, cash disbursements would count, but household items would not since they are excluded under the normal SSI rules for income. If SSA considers a trust to be a countable resource and the individual is still eligible for SSI, disbursements to the individual are not income but rather the conversion of a resource.

Special Needs Trusts
One type of trust that is excluded as a resource for SSI is called a Special Needs Trust (also known as a Supplemental Needs Trust or SNT). A SNT is an exception to the general rule that trusts created with a beneficiary’s own assets cannot be excluded for SSI. The trust must be irrevocable and the beneficiary must be:

- disabled and under age 65,

- solely for the beneficiary,

- set up by a parent, grandparent, legal guardian, or court.

Any assets in a SNT that originally belonged to the beneficiary must upon the beneficiary’s death be paid to the state to cover the amount of medical assistance paid on behalf of the beneficiary.

SNT assets are excluded as a resource for SSI, and a SNT typically limits the trustee’s discretion as to the purpose of the distributions in order to avoid affecting SSI. However, the disbursements may be countable income for SSI depending on their nature (as described earlier). Excluded disbursements are items or services that are normally excluded as income under SSI rules and include a broad range of possibilities. A few examples are recreational costs, educational expenses, computer equipment, professional services (such as attorneys and accountants), and medical costs not covered by Medicaid. (POMS SI 01120.200)

Pooled Trusts
Closely related to a SNT is a pooled trust. This is a communal fund with each beneficiary having a separate account as part of the trust. A non-profit association established and certified by the state must manage a pooled trust which includes making sure any disbursements are appropriate. Otherwise the rules are similar to those for a SNT; the differences are that in some situations the trust may be set up by the disabled individual, and the age requirement of being under 65 does not apply. (POMS SI 01120.225) In Wisconsin, authorized non-profit agencies are WisPACT, Wish Fund, and ARC Milwaukee.

As I indicated earlier, trust laws are complicated and subject to change. Hopefully I’ve provided you with information that can serve as a starting point for you.
Ben

Wed
26
Jun '13

Disability Insurance Benefits (DIB) After Retirement Insurance Benefits (RIB)

polaroid_KyotoJapanl

Dear Ben,

Back in January 2012 (soon after I turned 62), I started my Social Security retirement benefits taking reduced payments. I cut back on hours at the job I had for 30 years, earning just over $14,000 for 2012, because I wanted to stay below that year’s limit for earnings to collect my retirement without any more reduction. I worked until this month (May 2013) when I had to quit completely because my back gave out; my doc says I can’t work anymore. Someone told me I should get social security disability, but I didn’t think I could since I already get retirement. Can I get disability in addition to my retirement?

Ray M.
Door County, WI

Dear Ray,

Greetings from Kyoto, Japan! I’m here at the Golden Pavilion, which is one of the most popular buildings in Japan, and it attracts a large number of visitors annually. Right now, I’m strolling through the beautiful gardens and will take a break to answer your question.

You may apply for Disability Insurance Benefits (DIB) even though you already are receiving Retirement Insurance Benefits (RIB). If you are found to be disabled and are otherwise qualified for DIB, your benefit amount would be higher. This entitlement situation is called RIB/DIB.

Because you started your RIB right after age 62, your benefit payment was reduced by about 25% of what it would have been if you had waited to start drawing at your Full Retirement Age (FRA) which is now 66. The amount a person can receive by waiting until full retirement age is called the Primary Insurance Amount (PIA); normally a beneficiary’s DIB payment is the full PIA, regardless of when DIB entitlement starts.

However, for someone (such as you) who has received reduced RIB before DIB entitlement, the DIB payment is normally the PIA, reduced by the amount the RIB would be reduced if the beneficiary had reached FRA in the first month of DIB entitlement. So, in your case, if Social Security finds that you became disabled beginning in May 2013, your DIB entitlement date will be November 2013 (five full months after your disability onset.) That means you will have received reduced RIB payments from January 2012 through October 2013: 22 months. Your DIB payment would then be your PIA reduced by 22 months at the rate of 5/9ths of 1% per month (the same rate used for early RIB); so the reduction in your case would be 12.2%. (POMS RS 00615.410)

RIB/DIB situations can differ depending on when a person started RIB and became disabled. For example, if someone who has been receiving reduced RIB can establish a disability entitlement date before RIB started, the DIB payment would not be reduced at all. And the beneficiary would receive the difference between the RIB payment amount and the DIB payment amount for the months since the RIB started.

Even though a RIB beneficiary may apply for DIB with potential retroactivity of a year of entitlement, a higher DIB payment would normally not result for someone who has a potential disability entitlement date past his/her full retirement age. RIB/DIB scenarios that involve factors such as multiple PIA’s, a disability freeze, deductions due to pension offset or excess work earnings, or entitlement, to other types of Title II benefits can be more complicated.

In your case, Ray, you should contact Social Security as soon as you can to apply for DIB.

Well, back to my sightseeing. I have to see what is happening on the other side of the reflecting pond.

Ben

Thu
11
Oct '12

Social Security Benefit Overpayments

Outside a cave in Slovenia

Hi Folks!

Gathering some thoughts here as I prepare to do a little caving in Slovenia!  Under Slovenia resides over 8,000 plus caves. I’m traveling with a local guide to explore some of these fascinating and fantastic otherworldly spaces. In Slovenia, you can have one eye on the sea (the Mediterranean), then look in the other direction and be surrounded by high mountains (the Alps).  As you can tell a little bit by my photo, this country also has its share of forest!

Here’s a question I get asked all the time: What are social security overpayments?  For Social Security beneficiaries, this is an important thing to be aware of and if you can, AVOID!

When the Social Security Administration (SSA) pays a beneficiary more than is due, the beneficiary needs to work with SSA to settle the resulting overpayment.

Causes of Overpayments

Causes of overpayments vary depending on the SSA benefit program involved. In the Social Security Disability Income (SSDI) program, causes include unreported substantial work or the death of a family member receiving benefits. With Supplemental Security Income (SSI) overpayments can be caused by numerous factors including earnings from work, marriage or divorce, living arrangement changes, admission to or discharge from an institution, and absence from the United States.

Avoiding Overpayments

No one wants to pay back money already received or spend the time needed to settle an overpayment. So doing what is needed to avoid overpayments is well worth the effort. Mainly, reporting changes that can affect benefits in a timely and accurate manner to SSA can prevent most overpayments.

Reporting also fulfills a beneficiary’s reporting responsibility which is important if a waiver is requested   (as explained below.) Normally SSA considers a report timely if made by a beneficiary within 10 days after the end of the month in which an event or change occurs.

In most cases SSA eventually discovers changes that affect a person’s benefits, even without direct beneficiary reporting. SSA has automated computer communication with numerous federal and state government agencies that reveal many changes.

What Happens When Overpayments Occur?

Even when a beneficiary reports all the needed information accurately and on time, an overpayment may still sometimes occur. Whenever an overpayment does arise, a beneficiary has options and rights in how it is settled.

Once SSA identifies an overpayment, they mail the beneficiary an official notice that shows the amount of overpaid benefits, the times periods involved, the cause of the overpayment, and the beneficiary’s rights and options.

If a beneficiary disagrees with the existence or the amount of the overpayment, he/she can request an appeal asking SSA to change its decision. By appealing a beneficiary has the opportunity to explain and present evidence why the overpayment is incorrect to an SSA official who did not make the initial overpayment decision.

Another option is for the beneficiary to request a waiver of the overpayment. This is not disputing the fact that an overpayment occurred but rather asking SSA to disregard (waive) the overpayment so no repayment is required. For SSA to grant a waiver, certain conditions have to be met.

The first condition is that a beneficiary must meet is being without fault in causing the overpayment. If a beneficiary has fulfilled his or her reporting responsibilities by informing SSA of changes in an accurate and timely manner, SSA will normally find that the person is without fault. SSA also considers factors such as age, level of understanding, education, language limitations, history of being overpaid, and any possible misinformation the beneficiary may have received from SSA.

The second condition that a beneficiary must meet can be any one of the three following conditions: 1) recovery of the overpaid amount would deprive the beneficiary of income needed for ordinary and necessary living expenses, or 2) recovery would be unfair regardless of the beneficiary’s financial status, or 3) the overpayment amount is small enough that recovery would not be worthwhile for SSA.

If an appeal or a waiver is not possible and the overpaid amount must be refunded, recovery can occur in various ways depending on the circumstances. If a beneficiary also has an underpayment, SSA will offset the overpayment by the underpaid amount.  If an overpaid person is still receiving payments, SSA can withhold the overpayment from the ongoing benefits; this may be the entire monthly benefit until the amount is repaid or an agreed upon amount per month over a period of time. SSA may do cross-program recovery which is withholding money from a beneficiary’s ongoing SSDI benefits to recover an SSI overpayment or vice versa. In certain cases SSA may agree to a compromise settlement for less than the full amount of the overpayment. And when a person is no longer entitled to benefits and does not settle an overpayment, SSA may withhold the amounts from future Social Security benefits (retirement or disability) or from federal income tax refunds.

What has been given here is general information about SSA overpayments. For more extensive and detailed information, see the SSA website (http://www.ssa.gov/pubs/10098.html), contact your local SSA office (https://secure.ssa.gov/apps6z/FOLO/fo001.jsp), talk to a benefits specialist if possible (http://eri-wi.org/benefits-specialists), or do a web search for the multiple sites that discuss overpayments.

Be seeing you soon!

Ben

Wed
25
Apr '12

Technology Costs for Self-employed SSA Beneficiaries

Climbing in the Arizona Mountains

Hello Friends,

Many of you may not know this, but I have a pretty strong fear of heights.  However, a friend managed to convince me to try a little mountain climbing recently.  All I can say is I tried never to look down and managed to make it to the top.  As they say, the view was worth it but I’m not sure I will be repeating this any time soon!  Here’s a topic I get asked about on occasion.

People who are self-employed are increasingly dependent on the use of technology for both business tasks themselves and record maintenance. A self-employed Social Security Disability Income (SSDI) beneficiary or a Supplemental Security Income (SSI) recipient is often able to apply certain technological costs used in connection with their work activity as deductible expenses (as allowed by IRS) to arrive at their Net Earnings from Self Employment (NESE.) This is the amount that the Social Security Administration (SSA) uses in determining Trial Work Period (TWP) service months, Substantial Gainful Activity (SGA), and countable earned income for SSI.

Computer hardware, software, and supplies and phone equipment are the kind of costs that may be declared as a capital expense or a business deduction if used in a self-employed person’s business. A capital expense is normally the cost of getting started in business before actually beginning operations. A person can then recover the amount spent through depreciation, amortization, or depletion which allows a deduction of part of the cost each year. A person may elect to deduct or amortize certain business start-up costs.

To be deductible as a business expense, an expense must be both ordinary (common and accepted in the business) and necessary (helpful and appropriate for the business.) An expense does not have to be indispensable to be considered necessary. Normally, if an expense is used partly for business and partly for personal purposes, the business part may be deductible.

For specific tax issues a beneficiary should consult with a tax advisor and/or the Internal Revenue Service (IRS.)

Also remember that for SSA programs, an expense may possibly be used as an Income Related Work Expense (IRWE) or for a Plan to Achieve Self Support (PASS) but cannot be used more than once.

Mon
16
Apr '12

Update Alert: Social Security Benefits Going Electronic

Philadelphia, USA - fireworks for the museum

Hi All -

I’m not sure how this photo relates to this topic but I happened to catch some fireworks in Philly and thought I’d share.  If you are a social security beneficiary, you’ll want to take note of this information!

Starting next year, Federal government cash benefits will all be electronic.  Social Security, Veterans, and Railroad Retiree benefits will no longer issue paper checks to individuals.  People will have the option to use direct deposit or a debit card system to receive benefits.  

If you need assistance or have questions about this transition, you can contact www.GoDirect.org or call 1-800-333-1795.