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Maybe a simple question, but I haven't found an answer: Schedule SE says that for 2020, earnings over 137,700 aren't subject to social security tax.

We file jointly; my spouse has self-employment income. I'm guessing that this limit is based on our jointly-declared income, and not just her self-employment income. Is that correct?

After more googling, I am filled with doubt. Maybe my spouse's self-employment income is all that counts, in which case it's nowhere near the cutoff? (Even though my W2 job creates SS benefits for her, and we file jointly?) Sigh.

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  • irs.gov/instructions/i1040sse#idm140387295483424 "Joint Returns: Show the name of the spouse with self-employment income on Schedule SE. If both spouses have self-employment income, each must file a separate Schedule SE." The spouse, singular. Also: while she can get a 50% benefit on your earnings record (if still married or divorced but not remarried) when you retire, if she also qualifies for her own benefit on her own record she gets ONLY the larger one, not both, and if she earns anywhere near as much as you 100% of her own benefit will be larger than 50% of yours. – dave_thompson_085 Feb 17 at 7:57
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Social security is an individual tax/benefit and therefore the cap is applied to individual's income separately even on a joint return. It's wage + self-employment income for the individual listed on the Schedule SE, not based on household income. If you and your spouse had self-employment income you'd each file a separate Schedule SE and the limit would apply to each individually.

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  • Thanks, but to be sure: if I have W2 income, and just she has Sched C income this year, I guess that means the cutoff on form SE only counts her SE income? – Robert Frederking Feb 15 at 22:38
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    Right, her income counts toward her social security cap, your income towards your social security cap. So if her income is all from business profit then that's all counts towards her social security cap. – Hart CO Feb 15 at 22:41
  • What you do has no bearing on her Schedule SE (for social security tax). – Joe Feb 15 at 22:41
  • Thanks, both, I would have done that wrong. – Robert Frederking Feb 15 at 22:44

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