Self-employed with 1099-NEC approaching FRA - Do I face the 45 hour/month limit for Social Security?
I'll be turning 62 in February 2025 and plan to start collecting my Social Security retirement benefits in April 2025. My situation is a bit confusing - I work as an executive assistant for a consulting firm but I'm classified as an independent contractor (getting 1099-NEC forms). I'm planning to reduce my schedule to about 20 hours per week to stay under the earnings limit ($24,780 for 2025, I think?). Here's what's confusing me: I read somewhere that if you're self-employed, you're limited to 45 hours per month of work regardless of earnings. But I don't own any part of this business, have zero decision-making authority, and don't have any financial stake in the company. I just do admin work, billing, scheduling, etc. for the owner. Do those 45 hour/month restrictions apply to someone in my position? Or am I just subject to the regular earnings test since I have no "substantial interest" in the business? I really need to know because planning my schedule for next year depends on this! Thanks for any insights.
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Zainab Abdulrahman
The 45 hour per month guideline is specifically for determining whether you're engaging in "substantial services" if you own or have significant interest in a business. Since you're simply an independent contractor with no ownership stake, you're only subject to the annual earnings limit ($24,780 for 2025 if you're under FRA). The Social Security Administration doesn't care how many hours you work - they only care about your earnings when you're an employee or independent contractor without ownership interest. You can work 80 hours a week if you want, as long as your earnings stay under that threshold for the year.
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Miguel Castro
•Oh thank goodness! That makes planning so much easier. So as long as I keep my total earnings under $24,780 for the year, I can distribute my hours however I want?
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Connor Byrne
No, you're absolutely fine! The 45-hour rule specifically applies to people who OWN all or part of the business where they work. It's one of the tests SSA uses to determine if someone is *really* retired or just pretending to be while still running their business. Since you're just a contractor with no ownership stake, you're only subject to the regular earnings test. You can work 100 hours a month if you want - SSA only cares that your total earnings stay below the annual threshold.
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Yara Elias
•this is right!!! i went through this last year. I do bookkeeping work as a 1099 person and was worried about the same thing. only the $$$ matters for us!
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QuantumQuasar
Everybody's situation is different. I had a friend who claimed "independent contractor" but the SS people said she was trying to hide her business ownership. They did like a whole investigation thing and denied her benefits for 6 months!! Make sure youve got paperwork showing you're really just a contractor not an owner!
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Keisha Jackson
•This is actually an important point. The Social Security Administration does look at the substance of your work relationship, not just the label. If you function like an employee but are classified as a contractor, they use several tests to determine your true status. However, the original poster seems to clearly be a contractor with no ownership stake, so the 45-hour rule definitely doesn't apply. Just the annual earnings limit matters here.
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Paolo Moretti
I've been on SS retirement for 4 years now and let me tell you - its all about the dollars not the hours! Unless you own part of the business, they ONLY care about the earnings limit. I do handyman work about 30 hrs a week but keep my earnings under the limit. Never had a problem.
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Amina Diop
•Question: Do you report your earnings quarterly or just at tax time? I'm hearing conflicting things about how often we need to report.
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Amina Diop
I'm going through this EXACT SAME THING right now!!!! I turned 62 in November and start getting my SS benefits in January. I also do admin work as a 1099 contractor for a small business (about 25 hrs/week). I called Social Security last week to ask about this and it took me THREE DAYS of trying before I finally got through to someone. When I finally talked to an agent, they confirmed what others are saying - the 45 hour monthly limit only applies to business owners/significant stakeholders. For regular 1099 workers, it's just the annual earnings limit that matters. By the way, I had much better luck reaching SSA by using this service called Claimyr. I found it at claimyr.com after getting frustrated with constant busy signals. They somehow got me through to an agent in less than 20 minutes after days of trying on my own. There's a video showing how it works here: https://youtu.be/Z-BRbJw3puU Saved me so much frustration!
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Miguel Castro
•That's so helpful to hear from someone in the same situation! And thanks for the tip about Claimyr - I've been avoiding calling because everyone says it's impossible to get through. I'll definitely check that out if I need to call them with any other questions.
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Keisha Jackson
To summarize what everyone is saying (correctly): 1. The 45-hour per month limitation is ONLY for self-employed individuals who own or have substantial interest in a business. 2. As a 1099 independent contractor with no ownership stake, you're only subject to the annual earnings limit ($24,780 for 2025 if you're under full retirement age). 3. You can work any number of hours as long as your earnings stay under that threshold. 4. Make sure you have documentation that clearly shows you're truly an independent contractor and not a disguised business owner. 5. Be aware that if you exceed the annual limit, SSA will withhold $1 in benefits for every $2 you earn above the limit. One additional note: Keep track of your projected annual earnings carefully. If you think you might exceed the limit, it's better to report this to SSA proactively than to face an overpayment notice later.
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Miguel Castro
•Perfect summary, thank you! One last question - I read that in the first year of collecting benefits, they apply a monthly earnings test rather than an annual one. Is that correct? So instead of $24,780 for the year, I'd need to stay under $2,065 per month starting in April 2025?
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Zainab Abdulrahman
Yes, that's correct about the monthly earnings test in your first year. For the remainder of 2025 after you start receiving benefits in April, you'll be subject to a monthly limit (approximately $2,065 based on the $24,780 annual limit) rather than the annual limit. So from April-December 2025, you'd need to keep your earnings under $2,065 each month. Then in 2026, it switches to the annual limit instead of monthly. This is actually helpful for many people because it allows you to earn whatever you want in the months before you start collecting benefits (January-March 2025 in your case).
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QuantumQuasar
•Wait this doesn't sound right to me. I thought they look at the whole year's income even in the first year. That's what hapened to my brother - he worked full time Jan-July then retired and started SS in August, but they still counted all his January-July income!
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