[Atlas Sneezed]

Self-employed people can incorporate and pay themselves a reasonable fixed salary, with the remainder of their business income distributed as profits, not subject to employment tax.

Note that the increasing cap is not just an increase in taxes on upper-middle earners, but is it a benefit cut for those earners who are below this line, and think themselves unaffected. They are decreasingly vested each time the cap rises.

In the 1960's my young engineer father told me that he stopped paying SS taxes about in April, and was then fully vested. Now, many or most young engineers are not even fully vested, even after paying 15% all year long. They won't get full benefits.

[mapleleafrag]

can someone explain why a homemaker, who has never worked secularly (outside of the home) in all their adult years can draw social security? i thought it was for those who paid into it previously. when i worked in gov't. housing, i also saw plenty of young (mostly minority) adults drawing off of social security with so-called disabilities (crying jags, emotional distress, back problems, etc.) who had never worked a day in their life and had gone straight from welfare to social security. please elucidate?

[coder2]

Self-employed people can incorporate and pay themselves a reasonable fixed salary, with the remainder of their business income distributed as profits, not subject to employment tax.

Correct, in theory, but not necessarily true... For example, let's say you thing $50K is a reasonable salary, but after expenses, you still manage $50K in profits... for a total of $100K income... Do that a few years in a row, and I guarantee someone will be getting a visit.

No way are they going to let someone get away with that for very long...