Social Security and Earning Income Abroad before age 67

[bostonfrog2012]

I am not sure this is quite the right forum to put this question, but I had seen others post questions regarding Social Security. The problem has to with earning any money abroad that exceeds 45 hours a month (irrespective of how much you earn per hour, as that's not important under the rule). But if you are under FULL retirement age (which is now 67 and no longer 65), you are subject to what is called the Foreign Work Test that means you may not work for more than 45 hours a month as an independent contractor outside of the US and also get SSA benefits. You can, however, once you've reached 67. I am four months shy of 65 and started receiving reduced SSA benefits at age 63.

I have permanent residency status in Mexico with a CURP and RFC #. And I've been offered an online teaching job out of the UK which I would like to accept. I am leery about having the salary deposited to a US account because of the prying eyes of the IRS/SSA. I am not one to be a tax evader and dread the thought of having benefits cut permanently for defying this arcane SSA rule!

However, it has been suggested to me that I might consider opening a Mexican account to have this money deposited. I have procrastinated about opening one, and it certainly isn't difficult. They´ll require proof of residence (now in Michoacán where I own a house), my residency permit, CURP and probably my RFC. They won't require a US social security number. Of course, the US gov't could, if it really wanted, track me down.

Do any of you in the Chapala, Ajijic or Jocotepec area do freelance work and are under 67? This issue has worried me for a few weeks now. I don't want to lose the SSA benefits but I will also get a lifetime annuity from my former employer at 65 or 66. But I could use this extra income for at least a year or two, especially since I just had an orthopedic accident that cost me $5,800 in hospital costs here.

Sorry for this long message, but I thought the Chapala forum would be the best place to find retired Americans who have experience with this, or give me a contact (free or paid) who could advise me on ways to get around this rule. I would like to attach a PDF from the SSA but that file type is not allowed here.

Thanks in advance!!

Michel

 

[Bisbee Gal]

As a US citizen you are required to report your world-wide income on your tax return.  You may be able to exclude foreign earned income and/or get credit for taxes paid to other countries, but you do have to report the income to IRS then file a form to exclude any earnings and/or get a foreign tax credit.  One assumes that IRS and SSA computers talk to each other.   

https://www.irs.gov/individuals/international-taxpayers