s: My husband is a 58-year-old farmer. He is a very stubborn man. He is against paying any kind of federal tax, including Social Security taxes.

He would do anything near the end of the year to show a loss on his farm. He will buy equipment. He will buy seeds or fertilizer.

He’ll do whatever it takes to be able to show a loss on his tax return, so he doesn’t have to pay any Social Security self-employment taxes. He’s been doing this all his adult life.
He is also a very old man. Even though I have a college degree in nursing, I will not be allowed to work outside the home. I am 54 years old. So, we’re approaching our senior years and I’m worried what will happen to us financially. Will we be eligible for any type of Social Security? I’ve heard of something called supplemental Social Security for people who don’t qualify for Social Security. How does this work?

a: I’ve met stubborn men like your husband many times in my 50-year Social Security career.

Or, to be more precise, I usually meet the widow of men like him who come to the Social Security office after his death and wonder what benefits they might be entitled to. They learn that because he didn’t put anything into Social Security, he (or the widow) wouldn’t get a cent from Social Security.

This is the fate that awaits you.

So I hope your husband has some investments or insurance or put some money aside, because you two will get nothing from Social Security.

You mentioned that other program that I mistakenly labeled “Supplemental Social Security”.

I’m sure you’re referring to the Supplemental Security Income Program. SSI is a federal welfare program administered by the Social Security Administration. (As I always explain to my readers, Social Security income is funded from general tax revenue, not Social Security taxes.)

SSI pays a small monthly stipend (currently less than $900 a month) to people with disabilities and people over 65 years old.

How poor is he?

Well, you must have assets under $3,000. With the farm (and with all that equipment your husband buys to avoid paying Social Security taxes), I’m sure you’ll never be eligible for Social Security payments. So, all I can say to you is, “Good luck!”

by the way. I showed your email to my wife, and she insists I add this to my answer. She said: What do you mean that your husband will not allow you to work? It’s your life and you should be able to make your own decision about whether to work or not. Tom says that if you spend the next 10 years nursing, by the time you’re 64, you’ll have earned a small but decent Social Security pension. And you will have your own income from your job during that time. think about it.”

s: My husband and I own a small heating and air conditioning business in Northern California.

We’ve been doing this for nearly 30 years. He does most of the physical work. I do all the office work (except for taxes done by our accountant).

My husband is 61 and I am 57. We get Social Security data occasionally.

He’s due $3,100 a month at age 67 and about $2,200 if he gets benefits at age 62. My statement shows minimal earnings—all from before marriage—but not enough to get my Social Security. I remember reading your previous columns about how moms often get column (pardon my French!) in mom-and-pop work, but I can’t remember why. After all, we’ve been filing joint tax returns since we got married.

Can you please explain again why his Social Security record is full and my Social Security record is nearly empty?

a: Submitting a joint tax return has nothing to do with paying self-employment taxes and earmarking profits for Social Security purposes.

It happens with a tax form called the SE schedule. And apparently, all these years, your accountant has only been putting your spouse’s name and Social Security number on the SE table.

This means that all of the company’s earnings end up on your spouse’s Social Security record.

(And by the way, your accountant isn’t the only one who does this. In my 50 years of working for the Social Security Administration or writing about Social Security issues, I think about 90% of the “pops” in mom-and-pop companies get all the security credits Social – which means 90% of “moms” end up with an empty Social Security list like yours.)

This is the bad news. The good news is that it may work for you, because you will have spousal benefits on your spouse’s registry.

The combination of his higher pension and your wife’s rate could make you more money than you would if you split the business earnings—meaning you both could have ended up with smaller retirement benefits.

Also, assuming he dies before you die, your widow’s rate will be more because it will depend on his higher retirement benefit.

s: My first husband and I ran a small business together for 25 years before divorcing about 10 years ago.

We both got married again after about two years. I am now 62 years old. My current husband is 58 years old and plans to work until the age of 70. My ex-husband is 68 years old.

I don’t have my 40 quarters because my first husband took all of my Social Security earnings from our business. Can I get any of my first spouse’s Social Security now, and later move to benefits from my current spouse?

a: No, you cannot do that. As long as you are married to Husband #2, you cannot get any Social Security from #1.

Your case provides a good example of how this tax filing tactic of giving all the Social Security credit to highlight mom-and-pop businesses can really screw up.

You will not get any Social Security benefits at all for the 25 years you spent running this business with your ex.

Furthermore, you will have to wait for your current spouse to apply for his Social Security before you can receive benefits on his record. In fact, this may be an incentive for your spouse to offer him at full retirement age rather than wait until 70.

If you have a question related to Social Security, Tom Margenau has two books with all the answers. One of them is called “Social Security – Simple and Smart: 10 Easy-to-Understand Fact Sheets that will answer all your questions about Social Security.” The other is Social Security: 100 Myths and 100 Truths.

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