Legal Question in Business Law in Nevada

I’m not sure if this is a tax question or Social Security issue or setting up an LLC problem. I took early Social Security at age 62. I will be 64 this October. I am working part-time as a real estate investor. I am aware of the limit Security Security puts on annual income if you work while collecting benefits until I reach age 66, when there will be no more limit. This year, I am allowed to earn up to $17,040 before they start deducting anything earned over that limit from my monthly Social Security payment. My question is: Is there a way to set up my LLC so that I am an officer of the corporation, and pay myself a salary not to exceed $17,040 (or whatever the annual limit will be in 2019 and 2020) until I turn age 66 when all limits income are removed? I want to place any income derived from my RE deals above the limit into the corporate operation and working capital funds. Is this possible? I just want to earn as much as I can but still stay within existing Social Security rules, and grow my corporation. Also, I am setting up my LLC in Nevada, but I am not sure if this needs to be addressed under Oregon LLC regulations. My home state is Oregon.


Asked on 7/12/18, 4:16 pm

1 Answer from Attorneys
Rick Williams Law Offices of Frederick D. (Rick) Williams, Chtd.

While your question does cross into several areas, at its heart, it is one for someone very knowledgeable about SS benefits eligibility. You certainly can set up a Nevada LLC to conduct your investment operations, and the revenues generated thereby can be characterized as either "member distributions" or "earned salary" and the tax consequences can be rather dramatically different between the two. You should consult a CPA or EA familiar with LLC accounting (they need to know details of reporting for a "single member disregarded entity") and also well versed in SS benefits.

As the sole member (or officer, if you prefer) of your LLC, you can choose to characterize the revenues as you and your tax advisor see most appropriate, within the law. If you draw less than the SS threshold amount as earned income, and the rest either is disbursed as a member distribution (similar to dividends on any corporate stock shares you may own), or retained earnings within the company accounts, you may be able to preserve your eligibility. Get some good advice from a qualified accountant who can walk you through the details of the distinctions and how they are reported and taxed.

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Answered on 7/13/18, 12:23 pm


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