Should an owner still participate once they have collected S.S.?

[Lori H]

a 66 year old owner of a C-corp recently took SS benefits. He is being advised by his CPA that he should cease taking income from the company due to the cost of FICA.  His wife is employed at the company and she inquired as to whether he could defer on 1099-M income from rent he receives.  They have a SIMPLE 401(k) and he has never deferred the full amount. I suggested maybe a minimal income close to the amount he would like to defer which is generally $100 a check. 

[Tom Poje]

I don't know if there is any particular since everyone's situation is different.

one possible consideration:

Your Social Security Benefits May be Taxable

IRS Tax Tip 2016-18, February 11, 2016                                                              

If you receive Social Security benefits, you may have to pay federal income tax on part of your benefits. These IRS tips will help you determine if you need to pay taxes on your benefits.

• Form SSA-1099.  If you received Social Security benefits in 2015, you should receive a Form SSA-1099, Social Security Benefit Statement, showing the amount of your benefits.

• Only Social Security.  If Social Security was your only income in 2015, your benefits may not be taxable. You also may not need to file a federal income tax return. If you get income from other sources you may have to pay taxes on some of your benefits.

• Free File.  Use IRS Free File to prepare and e-file your tax return for free. If you earned $62,000 or less, you can use brand-name software. The software does the math for you and helps avoid mistakes. If you earned more, you can use Free File Fillable Forms. This option uses electronic versions of IRS paper forms. It’s best for people who are used to doing their own taxes. Free File is available only by going to IRS.gov/freefile.

• Interactive Tax Assistant.  You can get answers to your tax questions with this helpful tool and see if any of your benefits are taxable.  Visit IRS.gov and use the Interactive Tax Assistant tool.

• Tax Formula.  Here’s a quick way to find out if you must pay taxes on your Social Security benefits: Add one-half of your Social Security to all your other income, including tax-exempt interest. Then compare the total to the base amount for your filing status. If your total is more than the base amount, some of your benefits may be taxable.

• Base Amounts.  The three base amounts are:

  • $25,000 – if you are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from your spouse for all of 2015

  • $32,000 – if you are married filing jointly

  • $0 – if you are married filing separately and lived with your spouse at any time during the year

    Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
     

    https://www.irs.gov/uac/your-social-security-benefits-may-be-taxable

...............................

if I understand things correctly, by deferring (assuming non-Roth) you reduce your taxable income, and therefore could avoid or reduce what taxes you may have to pay.

........................

for someone who hasn't quite reached full retirement age then maybe the following discussion from AARP applies

 

Depending on your age, what you earn might impact the benefits you receive

by Stan Hinden, February 25, 2013|

[david rigby]

Is the wife already deferring the max?

[Lori H]

8 hours ago, david rigby said:

Is the wife already deferring the max?

 

the wife is not deferring the max. 2015 they made the same salary and he deferred $5200 and she $2600