Inbox Question | Running a Business & Collecting Benefits: What Counts Toward the Earnings Limit?
Big Picture Retirement®
Devin Carroll
4.7 • 545 Ratings
🗓️ 24 April 2025
⏱️ 7 minutes
🧾️ Download transcript
Summary
In this inbox episode, we break down how the Social Security earnings limit works—especially for C corp owners who split income between salary and dividends. Learn what counts toward the limit, what doesn't, and how smart income structuring can help you avoid benefit reductions.
Although this show does not provide specific tax, legal, or financial advice, you can engage Devin or John through their individual firms.
📍Contact Devin's team at https://carrolladvisory.co/podcast1
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Transcript
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| 0:00.0 | Welcome to the Big Picture Retirement Show. |
| 0:07.6 | Today, we're going to the inbox to answer questions sent in by you, our listeners. |
| 0:12.3 | Now, if you'd like to send us a question, just head over to big pictureretirement.com and click the Ask a Question tab in the top menu. |
| 0:18.9 | Oh, and just a quick reminder. |
| 0:19.9 | On this podcast, we provide |
| 0:22.0 | general information and not specific tax, legal, or financial advice. But if you're ever ready |
| 0:28.3 | to move from the broad education we provide here to personalized advice that's specific to you, |
| 0:34.7 | you can find links to our websites down in the description. Now let's jump in |
| 0:39.1 | to today's question. John, today's question comes from Steve, and Steve said, if I own 100% of a |
| 0:50.9 | C-Corp, are dividends paid out of that corporation considered earned income for |
| 0:56.0 | Social Security. Now, what I think Steve is asking here is, will this count against me for |
| 1:01.9 | the Social Security earnings limit? As most of our listeners know, there's an earnings limit. |
| 1:05.7 | If you file for benefits before your full retirement age, the Social Security Administration |
| 1:10.6 | imposes a certain |
| 1:11.9 | amount of earnings that you can have before they will start to withhold benefits. I think it's |
| 1:16.9 | a bit of an archaic law that needs to be done away with. I don't really know what the purpose |
| 1:21.0 | of the law is at this point, right? I mean, it's to disincentivize people from filing early. I get |
| 1:27.2 | that part, But if actually |
| 1:29.4 | the benefit payments coming to you are all going to be the same, right, over your lifetime, |
| 1:34.7 | that's how they've calculated the reductions. What difference does it make? Fair enough point, right? |
| 1:39.6 | You're going to get what you're going to get. Just why would the Social Security Administration |
| 1:42.7 | involve themselves in the affairs of people that are willing to follow early? And then it leads to questions like this |
... |
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