Quote:
Originally Posted by philfree
BRC and Mos, without quoting I'll just say thanks for the responses.
I'm not sure how it works in regard to how much I'll get based off my income. I always had a smaller salary but received a lot of income in k-1 disbursements. If what thinking is correct I'll probably get my SS based on my salary and not my total income. Please tell me I'm wrong.
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Unfortunately, you're not wrong.
I'm assuming the K1 is owner distributions or some such thing. The easy way to check is to see if you paid self-employment tax on it, and I really doubt that you did. I think one purpose of having a K1 is to avoid paying that tax, which means you don't get the benefit later.
People always say to maximize your K1 to minimize taxes, but I never really saw a huge advantage in that. Other than medicare where you're going to get the benefit anyway, paying self-employment taxes on income is going to give you more social security income later. It's probably slightly better to take K1 income over regular income, but paying on regular income kind of creates a forced savings with regards to social security.