Understanding Social Security Benefits in 2020

If you receive Social Security benefits, or if you’re about to, you’re in for some good news.  2020 looks brighter with the annual changes that have been announced by the Social Security Administration (SSA) for the coming year.  If you need help understanding your benefits, speaking to an attorney who focuses on such matters could be a great idea!

Rate Increase 

If you’re one of the 67 million recipients of Social Security, you’ll be happy to know that your monthly check will go up by nearly three percent in 2020.  That’s right, the annual cost of living adjustment (COLA) rose by 2.8 percent, for an average increase of nearly $40 per month.  It’s no landslide, but every dollar helps, right?  For those collecting Social Security Disability benefits, there has also been an increase of between $40-$70 per month, depending on circumstances.

At What Age Should I Start Collecting Benefits?

When it comes to when to start collecting a Social Security check, there are a number of factors to consider.  Depending on the year in which you were born, the age at which you have the option to collect is different.  The absolute youngest some people can collect partial benefits is age 62.  For individuals living on a shoestring, that income is desperately needed and it may be a good idea to file for benefits immediately, even though the eligible amount will be less for the duration of the benefit (70 percent of the sum provided at full retirement age). Waiting until full retirement age will produce a significantly higher benefit.  It’s important to note that if you can afford to wait to collect benefits even longer, until age 70, the monthly benefits are over 75 percent higher.  It’s something to consider.

Currently, individuals who turned 62 during 2019 cannot fully retire until they become 66 and four months old. The retirement age increases by two months for every year after that, making retirement at age 67 for those born in 1960 or later.

Can I Continue to Work and Collect Social Security Benefits?

If you are just reaching full retirement age in 2019, and you are continuing to work, it’s worth noting the restrictions on earnings. While you can continue to be employed while collecting Social Security, there are limits on potential earnings. For individuals who earn just under $47,000, there is no penalty.  But for every $3 over the earnings limit that is earned prior to reaching full retirement age in that year, there is a corresponding $1 reduction in Social Security benefits.  After full retirement age, benefits will resume to the normal amount.

Are You Confused?

If thinking about Social Security gives you a headache, you’re not alone.  The SSA is a huge, unwieldy organization, and figuring out the best path forward can be a daunting task.  That’s why the Jackson Social Security benefits attorneys at the office of Derek L. Hall, P.C. are here to help.  Let us walk you through the maze of the SSA and get you the benefits you deserve.  Contact our Jackson office today for a free, confidential consultation.

 

Resource:

investopedia.com/retirement/social-security-changes/

https://www.dlhattorneys.com/are-you-facing-a-social-security-disability-denial/

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Divorce and the IRS

One of the last things that you might be thinking about as you contemplate divorce is the implication the split will have on your taxes.  But the truth of the matter is, things are going to change, and knowing the basics puts you in a much better position as you negotiate the terms of the divorce.  Having a savvy divorce attorney by your side will make the whole process much easier.  So what exactly are the tax issues of which you need to be aware?

How to File

You really don’t have a choice as to whether to file as single or married.  The IRS says it all depends on the date your divorce was finalized.  Anything prior to December 31^st means you must file as single, even if you’ve been living as a couple for the majority of the year.  On the other hand, if the divorce becomes final on January 1^st or later, you can still file as married, even if you lived separately the entire year!

Head of Household 

As a rule, the custodial parent gets to claim head of household. However, that status may be transferred to the noncustodial parent with form 8332.  Another option for couples whose divorce was finalized before the end of the calendar year would be for an individual to file as head of household if you physically separated before June 1 and continued to pay 51 percent of the expenses related to home maintenance.

Child Support

Whether you paid child support or received it, there is no impact on your tax burden.  It cannot be deducted by the payer, and needn’t be claimed by the recipient.

Spousal Support

The rules for alimony depend on when the divorce was finalized.  For anyone who divorced prior to the conclusion of 2018, the payer may deduct alimony, while the recipient must claim it.  For divorces that occurred after 2018, payments are neither deducted nor claimed.

Claiming Dependents

The important rule here is that no child can be claimed by both parents at the same time.  If you have a disagreement as to who gets to claim a child, and you both decide to do it, you are simply asking for an IRS audit. Unless otherwise specified in your divorce decree, the IRS will likely allow the custodial parent to claim the child, assuming one parent has the child for more than half of the time in a given year.

Think Ahead 

It really is essential to consider all of the tax repercussions on the divorce before signing on the dotted line.  The issues discussed here, and others, will impact your finances for years to come.  That’s just one reason it’s so important to have the experienced Jackson divorce attorneys at the office of Derek L. Hall, P.C. working on your behalf. Schedule a confidential consultation in our Jackson office today.

https://www.dlhattorneys.com/what-men-need-to-know-about-divorce/

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