Personal Finance & Money Asked on September 5, 2021
Maybe a simple question, but I haven’t found an answer: Schedule SE says that for 2020, earnings over 137,700 aren’t subject to social security tax.
We file jointly; my spouse has self-employment income. I’m guessing that this limit is based on our jointly-declared income, and not just her self-employment income. Is that correct?
After more googling, I am filled with doubt. Maybe my spouse’s self-employment income is all that counts, in which case it’s nowhere near the cutoff? (Even though my W2 job creates SS benefits for her, and we file jointly?) Sigh.
Social security is an individual tax/benefit and therefore the cap is applied to individual's income separately even on a joint return. It's wage + self-employment income for the individual listed on the Schedule SE, not based on household income. If you and your spouse had self-employment income you'd each file a separate Schedule SE and the limit would apply to each individually.
Correct answer by Hart CO on September 5, 2021
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