Will switching from W-2 to 1099 contractor affect my Social Security survivor benefits earnings limit?

Social Security doesn't care whether your income is from W-2 employment or 1099 self-employment - both count toward the earnings limit for survivor benefits. For 2025, if you're under Full Retirement Age (FRA), the annual limit is $23,400, and they'll deduct $1 in benefits for every $2 you earn above that limit. The monthly earnings test only applies in the first year you claim benefits. After that, it's strictly an annual calculation. As a self-employed contractor, they'll look at your net earnings (after business expenses), not your gross income. Make sure you keep good records of legitimate business expenses to reduce your countable income.

Be SUPER CAREFUL with 1099 work because they check everything! My sister lost 6 months of survivor benefits because she didn't realize her part-time business income counted!! The SSA doesn't warn you when you go over - they just send a notice months later saying you owe them thousands back. It's a TERRIBLE system that punishes people for trying to work!!! 😡

As others mentioned, both W-2 and 1099 income count toward the earnings limit. However, there are some important differences to consider with self-employment: 1. For self-employment, SSA counts net earnings (after expenses), not gross income 2. They apply special tests for self-employment - they look at work activity as well as income 3. If you work over 45 hours monthly in self-employment, they may consider that substantial work regardless of earnings 4. You'll need to pay both parts of Social Security/Medicare taxes (15.3% total) as a self-employed person You should report estimated earnings to SSA at the beginning of the year, then they'll adjust benefits based on what you expect to earn. If your earnings change during the year, update your estimate to avoid surprises.

my husband died last yr & i get his SS now. i tried calling SSA to ask about working but was on hold 3+ hrs & never got anyone!!! so frustrating!!

Actually, I need to clarify something about self-employment for survivor benefits. The 45-hour rule is mainly for disability benefits (SSDI), not survivor benefits. For survivors, it's primarily the income that matters, not the hours worked. But do keep track of both your hours and earnings anyway, as SSA sometimes looks at both factors when determining if you're engaging in "substantial work." The monthly test is really only applicable in the first year of receiving benefits. Also, with self-employment, you'll need to make quarterly estimated tax payments for both income tax and self-employment tax. Consider setting aside at least 25-30% of your earnings for taxes.

just wondering why ur still working anyway? cant u just get ur husbands full benefit? my aunt gets like $2800 from her husbands SS and doesnt have to work at all

i heard that if u do 1099 work u can do the thing where u put all money into a solo 401k and then it doesnt count for SS earnings test. my tax guy told me that last year but i didnt try it

Thanks everyone for all the helpful information! I'm going to call SSA directly to confirm everything before making my decision. I'll definitely keep careful records of all my business expenses if I go the 1099 route, and make sure to set aside money for quarterly taxes. It seems like self-employment might actually work better for me since I can deduct legitimate business expenses from my countable income. I really appreciate all your insights!