Q. I will be 59 in October and retired last June from the federal government. I am thinking of starting an S corporation. My income limit is $16,900 under Social Security. If I pay myself less than the income limit, will my retirement benefits stay the same? Also, when I file my annual income tax, the profit from the S corporation will be listed; does this amount affect retirement payments?
A. This is really a question for your CPA, but, in my experience, all of the net income from an S corporation flows through to your personal tax return as earned income and, therefore, may affect your means-tested retirement benefits, like Social Security.