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How Does Not Filing Taxes Affect Social Security Benefits?

hey marc! Jan 26, 2022

I have a client just turned 62 and they haven’t filed or paid taxes in many years- probably 8-10.  My question is- How will this affect their SS benefits.  Will there be penalties? I know they have very little to no income for several years and I believe they may have been living off an inheritance and savings for a few years.

Social Security will not penalize your client, but his benefit will be affected because there are years without earned income. Hopefully, he has 10 years (40 credits) and has enough work to be eligible for a retirement benefit. Social Security uses your highest 35 years of indexed earnings to compute your benefit.  =If someone does not have 35 years of earnings SSA will use zeros for the number to bring it up to 35.  As a result, benefits are lower than if they had worked and had earnings posted to their record.

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