Welcome Guest! To enable all features please Login or Register.

Notification

Icon
Error

Federal Retirees


For those approaching retirement as well as the currently already retired, here is a forum to share ideas and thoughts and exchange questions and answers.


To read today's top news stories on federal employee pay, benefits, retirement, job rights and other workplace issues visit FederalDaily.com.

To maximize your retirement, we also suggest you read "Retired Federal Employees Almanac".


(Reminder: soliciting of services is not allowed on this site.)

Options
Go to last post Go to first unread
judeji  
#1 Posted : Tuesday, May 28, 2019 7:40:55 PM(UTC)
judeji

Rank: Member

Groups: Registered
Joined: 8/31/2013(UTC)
Posts: 13

Thanks: 6 times
I retired 6 years ago from federal service under VERA. Now at 56, I began receiving a monthly supplemental annuity benefit. I know that this benefit is subject to a earnings test (currently $17,000+).

My only earned income is as a driver with Uber. Gross earning per year around $35,000. Once Uber commissions are taken out I'm down to about $22,000 or so. I do not pay income tax on the full $22,000 since I am able to deduct .57 cents/mile. Therefore, when I deduct the .57/mile, my taxable earnings from ridesharing is well below the $17,000 supplement earning test limit. My thought is that this is the amount (the net earnings amount that I report to the IRS which deducts the milage) that I need to be concerned with, and as long as this figure is under the earnings test limit then I do not have to file the annual form with OPM. Am I correct? Or, would the full $22,000 that I received be considered net earnings?
postalvet  
#2 Posted : Wednesday, May 29, 2019 12:09:55 PM(UTC)
postalvet

Rank: Senior Member

Groups: Registered
Joined: 9/29/2009(UTC)
Posts: 16,797
Location: southern calif

Thanks: 1633 times
Was thanked: 2902 time(s) in 2294 post(s)
Originally Posted by: judeji Go to Quoted Post
I retired 6 years ago from federal service under VERA. Now at 56, I began receiving a monthly supplemental annuity benefit. I know that this benefit is subject to a earnings test (currently $17,000+).

My only earned income is as a driver with Uber. Gross earning per year around $35,000. Once Uber commissions are taken out I'm down to about $22,000 or so. I do not pay income tax on the full $22,000 since I am able to deduct .57 cents/mile. Therefore, when I deduct the .57/mile, my taxable earnings from ridesharing is well below the $17,000 supplement earning test limit. My thought is that this is the amount (the net earnings amount that I report to the IRS which deducts the milage) that I need to be concerned with, and as long as this figure is under the earnings test limit then I do not have to file the annual form with OPM. Am I correct? Or, would the full $22,000 that I received be considered net earnings?


all I can do is direct you to the rules.


https://investinganswers...ictionary/n/net-earnings



https://www.irs.gov/taxtopics/tc554
Postal employee (retired) 38 yrs who helps even if some do not believe me! I was a Steward, officer & trouble maker. Just Sayin'
thanks 1 user thanked postalvet for this useful post.
judeji on 5/29/2019(UTC)
GoHuskers  
#3 Posted : Wednesday, May 29, 2019 4:30:37 PM(UTC)

Rank: Senior Member

Groups: Registered
Joined: 1/13/2011(UTC)
Posts: 666

Was thanked: 124 time(s) in 99 post(s)
Per TurboTax and Uber you are considered self employed.

https://ttlc.intuit.com/...considered-self-employed

https://www.uber.com/dri...es/tax-tips-for-drivers/

As such, it would be the net self employment earnings as reported to IRS that would count. Since that will be below the earnings limit for the supplement everything will be fine.
thanks 1 user thanked for this useful post.
judeji on 5/29/2019(UTC)
judeji  
#4 Posted : Wednesday, May 29, 2019 5:21:45 PM(UTC)
judeji

Rank: Member

Groups: Registered
Joined: 8/31/2013(UTC)
Posts: 13

Thanks: 6 times
Thanks for the reply's, guys. I guess I didn't express my question very well, though. The crux of the matter is, I know that I am self employed, but am uncertain as to how OPM defines "net earnings". My assumption is that I can simply use the figure that I furnish to the IRS, which allows for a deduction of .57 cents per mile, in order to get to the net earnings figure that OPM is looking for. On the surface, the answer seems to be an obvious "yes". However, I was looking for verification since I haven't been able to find guidance from OPM that specifically says something such as "for purposes of calculating net earnings from self employment, the figure that is supplied to the IRS, on line xx of Form 1040, is the amount to be used for OPM purposes". Quite honestly, I'm overthinking things!
GoHuskers  
#5 Posted : Thursday, May 30, 2019 11:00:20 AM(UTC)

Rank: Senior Member

Groups: Registered
Joined: 1/13/2011(UTC)
Posts: 666

Was thanked: 124 time(s) in 99 post(s)
I agree, you're overthinking things a little. OPM defines "net" the same way the IRS does - gross less any applicable expenses. Your net earnings are the amount shown on line 31 of your Schedule C, which is also entered on line 2 of your Schedule SE.
thanks 1 user thanked for this useful post.
SD Analyst on 5/30/2019(UTC)
judeji  
#6 Posted : Thursday, May 30, 2019 5:11:56 PM(UTC)
judeji

Rank: Member

Groups: Registered
Joined: 8/31/2013(UTC)
Posts: 13

Thanks: 6 times
GoHuskers you're almost correct. Net earnings defined by the IRS is actually the amount shown on line 31 of Schedule C (net profit) multiplied by the fixed percentage of 92.35, as shown on Schedule SE (LINE 4). Line 4 of Schedule SE is actually your net earnings. Of course, that's just my opinion!

Otherwise, spot on! Thanks again.
GoHuskers  
#7 Posted : Friday, May 31, 2019 10:57:11 AM(UTC)

Rank: Senior Member

Groups: Registered
Joined: 1/13/2011(UTC)
Posts: 666

Was thanked: 124 time(s) in 99 post(s)
judeji - You're correct. SSA bases any needed deductions on the Net Earnings from Self Employment (NESE) which is the amount after applying the 92.35% multiplier. And since OPM applies the earnings test to the supplement in basically the same manner as SSA applies it to retirement benefits I'd assume OPM would also use that figure.

Edited by user Friday, May 31, 2019 7:41:53 PM(UTC)  | Reason: Not specified

thanks 1 user thanked for this useful post.
judeji on 5/31/2019(UTC)
judeji  
#8 Posted : Friday, May 31, 2019 5:35:08 PM(UTC)
judeji

Rank: Member

Groups: Registered
Joined: 8/31/2013(UTC)
Posts: 13

Thanks: 6 times
GoHuskers, this is part of why I was overthinking things. You are obviously very smart, and knowledgable, yet even you initially mentioned line 2 of Form SE as being net earnings. Someone can easily confuse "net profit" for "net earnings" and assume it is the figure on this line 2 that needs reported to OPM. This could be a pretty big mistake! If you have, say, 30k in net profits (line 2, Form SE) and report that to OPM, you are effectively going to get screwed out of about $1150 (if you do the math). Gets back to my other post. How darn hard is it for OPM to offer guidance on this ("net earnings" = amount on Line 4 of Form SE)? This simply doesn't need to be made so confusing for the average Joe.

Fortunately, you have straightened things out for me with your great analysis. I can't thank you enough.
Rss Feed  Atom Feed
Users browsing this topic
Guest
Forum Jump  
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.


This page was generated in 0.416 seconds.