Can social security retirement benefits be figured on unreported earnings?
SS says "Remember, it's your earnings, not the amount of taxes you paid or the number of credits you've earned, that determine your benefit amount." I didn't file taxes in the 1980s when I earned my highest income. My income now is at poverty level and I could never afford to pay taxes on what I once earned and didn't report. If I reported it now would it count toward my retirement benefits, or would I go to jail?? I understand that I would have to file back returns and that the penalties and interest would be enormous, more than I could pay. People negotiate settlements with the IRS all the time, however, and that might be possible for me. My question is, if I went through that process for just one year--say 1985, would the earnings for that year apply to my retirement benefit? And would they be figured retroactively? If there is no relationship between income earned and taxes paid it suggests that might be the case, absurd as it sounds.
Public Comments
- Failure to file federal & state income taxes is fraud. Even going back 20 years. If you report this income to SSI, they will cross reference with the IRS and you would end up owing the taxes, plus penalties (100% penalty) and interest which is compounded MONTHLY. Also, failure to report is a criminal matter and you could end up doing time in a federal prison. So, is the risk, worth the couple extra bucks you would make in SSI?
