Remember how those two women at Social Security told me it isn’t true that when you out-earn the poverty-level earnings limitation imposed on those who are forced to take SS payments early, the government takes away an entire month’s benefit check? That instead in the following year Social Security calculates what you owe in tax (it takes back $1 for every $2 you earn over $14,160, effectively a 50% tax), and you are given the option of either having the amount prorated over a number of months and deducted from your benefits in relatively affordable chunks or of sending the government a check to cover the tax?
Well, it turns out they were wrong.
After having told “Roselyn” that I expected to earn $14,900 this year, yesterday afternoon comes a notice in the mail informing me that my September check, which is paid in October, will be withheld, fuck you very much. Any amount that remains after the government calculates and confiscates the tax it thinks it’s owed will be repaid in January.
This will leave me $551 in the hole this month.
Feeling a little skeptical about “Roselyn’s” claim, as you will recall, I telephoned Social Security a second time on September 3, reaching one “Alison.” This CSR confirmed what Roselyn said and reiterated that the government’s procedure is not to take away an entire benefits check when it finds out you will exceed the earnings limitation.
Based on these two assurances, which were repeated several times by each woman during those conversations, I accepted a third course this fall, to run in the second eight-week session of the semester.
The pay for that contract will push my income high enough that Social Security will withhold not one but two benefits checks!
And that will put me $551 in the hole for September and for October or November, whenever they next get around to raping my income.
For God’s sake!
I don’t know what I’m going to do. I can’t get out of the course the chair offered to me and I accepted. Piss these guys off, and they won’t hire you again. So, I’m going to have to eat an $1100 shortfall. I certainly won’t be eating food, since at that rate I can’t pay the utility bills and buy groceries.
There are two choices:
1. Withdraw enough from The Copyeditor’s Desk as dividends to cover the shortfall. Actually, the S-corporation will have to pay me a few hundred bucks as “salary” in December, anyway. A $500 salary amounts to about $600 taken out of the corporate coffers, because as my “employer” CE Desk has to pay its half of FICA and some other taxes. For me as an individual, the net comes to about $375. So to make up a net of $1100, I will have to withdraw about $2,000 from CE Desk, in combined salary and dividends. That’s about half the corporation’s present cash holdings.
2. Raid savings set aside for an extreme emergency in which I would not be able to work at all. The emergency savings fund is still in an after-tax bank account, and so no tax consequences would occur if I steal from it.
However, if I get sick or hurt so I can’t work—and we’ve already seen that, as possibilities go, this is not as remote as one might think—then I will have that much less to cover my needs. As it is, emergency savings combined with Social Security would just barely cover expenses for one year. Take $1,100 out of it, and it’ll cover a helluva lot less than that: maybe 10 months.
God. What a mess!
Why did those two women tell me a phony story? Did they lie on purpose? Did they think it was funny to deliberately mislead some old lady and plunge her even deeper into poverty? I’m quite sure of what they said, because I asked both of them to confirm it, and I wrote it down as they were speaking: I have almost verbatim notes of our conversations.
Here’s how this shakes out, projected dollar by projected dollar:
Because the community colleges, like GDU, outsource their payroll to PeopleSoft, paychecks come in at cockamamie times. My second paycheck in October, when the third class kicks in, will only cover one week, and so I won’t have enough to cover my expenses that month, either. Apparently I’ll make it up in November (this assumes they rape me in September, which they’ve announced they’re doing, and then again in October, not in September and November). But meanwhile, between now and the middle of November I have to cope with a shortfall of over $1,000!
While it looks as though I’ll be flush as Croesus in November and December, that extra money has to be saved to cover the month-long winter break, when I’ll have no pay, and the penurious summer, when there’s a good chance I’ll have no teaching income.
What on earth to do?
Probably it would be better to take the $500 annual “salary” from the S-corporation in September or October; this nets about $375. It’s required, but there’s apparently you can pay it to yourself whenever you please.
Defraying the shortfall with a CE Desk “paycheck” would leave $725 to to make up out of savings, but with no tax consequences. That much remains in the S-corporation’s account, and so if a really dire emergency came up, the money would still be there. It’s your basic theft from Peter to pay Paul.
Assuming, though, that nothing awful happens over the next year, because property taxes have dropped a bit, I should be able to use that savings to help replace the $725 raided from the emergency savings fund. If I drop the umbrella on my car & homeowner’s insurance, the two cost reductions combined could be put toward the lost $725.
If the gods smile and I get three sections a semester next year, I should be OK. A summer-session course would guarantee OK.
But it looks like we’re talking just OK here. Short of taking a large drawdown from long-term savings that are still struggling to recover from the crash, we can forget any fantasies about vacations next year. 🙄
On the other hand…it’s a nice opportunity to go back on the half-off diet!