Social Security retirement application confusion - reporting income from self-employment in 2025

Report your husband's EXPECTED income for 2025. That's what the SSA cares about for the earnings test. Since he's below his Full Retirement Age (FRA), they'll apply the annual earnings limit which is approximately $22,320 for 2025. They'll deduct $1 from benefits for every $2 he earns above that limit. Make sure you're documenting how you arrived at the $23,000 estimate though - keep records of planned contracts, reduced hours, etc. If he ends up making significantly more, there could be an overpayment issue later.

when i filed last year they wanted to know my current income AND what i expected to make the next year. just tell them both numbers and explain hes cutting back his work. The SSA person told me they can adjust things later if you earn more or less than what you estimated

You need to report his EXPECTED earnings for 2025. Since he'll be 65 in June and planning to scale back work, here's what matters: 1) For months BEFORE he turns 65 in 2025, the monthly earnings limit is approximately $1,860 ($22,320 annual limit ÷ 12) 2) For months AFTER he turns 65 until his Full Retirement Age, a higher monthly limit applies (roughly $4,960 for 2025) If he's going to earn $23,000 spread evenly throughout 2025, that's about $1,917 monthly, which is only slightly above the limit for those first 5 months. SSA will withhold benefits for any month he exceeds the limit before reaching 65. Make sure to report it as NET self-employment income after business expenses but before tax deductions. And yes, keep documentation of your estimate methodology in case of questions later.

Everyone here giving advice about the earnings limit but NOBODY mentioned that self-employment income is counted DIFFERENTLY! The SSA doesn't just look at net income - they also consider "substantial services" for self-employed people. Even if your husband's INCOME goes down, if he's still providing significant services to the business (like 45+ hours/month), the SSA might count more toward the earnings test than just his net profit shows!!! This happened to my brother and he ended up with a HUGE overpayment notice! You need to document BOTH reduced income AND reduced time spent working in the business!!

my wife and i both went thru this last year. we put down what we thought wed make but ended up making more. SS took back money later which was a PAIN. they do average it out over the year though.

Since your husband is self-employed and planning to scale back, here's exactly what you should do: 1. Report his EXPECTED 2025 income as the main figure on the application 2. In the remarks section (or in a follow-up contact), explain that he's transitioning from full-time self-employment ($48K in 2024) to part-time work ($23K estimated for 2025) 3. Keep documentation of how business operations will be reduced (fewer contracts, shorter work days, etc.) One important note: If he's 65 in June 2025, his first 5 months of 2025 will use the lower earnings limit (~$1,860/month), but the month he turns 65 and after will use the higher limit (~$4,960/month). So if he can schedule more of his work for after June, it would be beneficial. Also, just be aware that trying to reach SSA by phone to discuss these details can be incredibly frustrating - hours of hold times and frequently disconnected calls. I recently discovered a service called Claimyr (claimyr.com) that got me connected to an agent in under 20 minutes. They have a video demo at https://youtu.be/Z-BRbJw3puU showing how it works. Saved me so much time when I needed to explain my complicated self-employment situation.

Doesn't this all depend on if he's at full retirement age? My neighbor just retired at 67 and he still works part time with no penalty at all on his SS check.

why doesnt he just wait until hes at full retirement age to apply? then he can make whatever $ he wants with no penalties

Just wanted to say thx for asking this question, im in almost the same boat (self employed, turning 65 next yr) and was confused about the same thing!

As someone who went through this exact situation with my spouse last year, I can confirm what others have said - you definitely report the EXPECTED 2025 income, not 2024. The SSA application specifically asks for estimated earnings for the year you'll be receiving benefits. A few things that helped us: - Write a brief explanation letter to include with your application detailing the business transition and how you calculated the $23K estimate - Keep monthly records once benefits start - even a simple calendar noting work days/hours - Consider the timing advice others mentioned about scheduling work after his 65th birthday in June when the earnings limit increases One thing I wish someone had told us: if his income ends up being significantly different from the estimate (more than a few thousand), contact SSA proactively rather than waiting for them to discover it during their annual review. It makes the adjustment process much smoother. The earnings test can seem scary but remember - any benefits withheld due to excess earnings get added back to your monthly benefit amount once you reach FRA, so it's not truly "lost" money, just delayed.

I went through this same process with my dad who was also a self-employed contractor. One thing that really helped us was calling the local SSA office directly instead of the 1-800 number - we got through much faster and the person was able to walk us through the self-employment income reporting step by step. They specifically told us to be conservative with our income estimate rather than optimistic. It's much easier to deal with getting money back later than having to repay an overpayment. Since your husband's estimate of $23K is right around that earnings limit, you might want to estimate slightly lower (like $21K) to be safe, especially given the unpredictable nature of construction work. Also, make sure you understand the monthly vs annual test. Even if he stays under $23K for the year, if he has one really good month early in 2025 where he earns over the monthly limit, they can withhold benefits for that specific month. This is why the timing suggestion about scheduling more work after June is so smart. Good luck with the application! The self-employment rules make it more complicated but it's definitely manageable with good documentation.

I've been through this process recently and wanted to add one more important point that hasn't been mentioned yet - make sure you're clear about what type of self-employment income you're reporting. For construction contractors, the SSA wants to know about NET earnings from self-employment (after business expenses like materials, equipment, gas, etc.) but BEFORE personal tax deductions. So if your husband has $30K in gross receipts but $7K in legitimate business expenses, you'd report $23K - which sounds like exactly what you calculated. Just make sure you have good records of those business expenses in case SSA asks for documentation later. Also, since he's scaling back significantly, it might be worth having him formally document the change in his business structure. Maybe reducing from full-time sole proprietor to part-time consultant, or changing his business registration to reflect the reduced scope. This creates a paper trail that supports your income estimate if there are ever questions. The earnings test is definitely tricky for self-employed folks, but the fact that you're being proactive about understanding it puts you way ahead of most people. Document everything and you'll be fine!

I'm in a very similar situation and this thread has been incredibly helpful! My husband is also self-employed (landscaping) and we're planning to file soon. One thing I wanted to add that might help others - when we spoke to our accountant about the income estimate, he suggested keeping quarterly records of both income AND hours worked starting as soon as benefits begin. He said this helps in two ways: 1) if SSA ever questions the "substantial services" rule that someone mentioned earlier, you have clear documentation of reduced hours, and 2) if your actual income varies significantly from your estimate, you can show SSA exactly when and why the changes occurred rather than trying to reconstruct everything at year-end. For construction and similar seasonal work, he also recommended being extra careful about those first few months of the year when work might be slower, then picking up in spring/summer. The monthly earnings test can catch people off guard if they have a couple lean months followed by busy ones. Thanks to everyone who shared their experiences - this is exactly the kind of real-world advice that's impossible to find in the official SSA publications!