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I'm a mathematician who has been unemployed for most of his professional life. Apart from a total of 5.25 years teaching at universities, over a span of about 25 years, the last of which was in the year 2000, most of my employment, has been at a subsistence level at mathematical research institutes, most of which have been in foreign countries. The universities were MIT, Brandeis and Ohio-State in Columbus. The research institutes are: (1) Institute for Advanced Study in Princeton; (2) Mathematical Sciences Research Institute in Berkeley; (3) Tata Institute for Fundamental Research in Bombay; (4) Max-Planck-Institut-fuer-Mathematik in Bonn; (5) Institut des Hautes Etudes Scientifiques. On some rare occasions, I've also been hired as a mathematical consultant without soliciting such employment. In the course of my career, these have totalled about $35,000, including about $1500 that I earned from private tutoring last year. I am active in my research and my work is respected. For me, mathematics and scholarship is not a job, it is a way of life and I do it whether I am employed or not. Most of the time in which I've done my work, I have been unemployed and living on charity. Such was my condition, for example, when I published my book, "Moduli of Abelian Varieties" (Springer Lectures Notes in Mathematics #1644). It says very clearly at the end of the preface that, most of the time I worked on the book, I was unemployed and living on charity. Springer-Verlag, the publisher, looks with indifference on the survival of its authors and that is par for the publishing industry and for the mathematics profession as a whole. For me, what matters is that I like mathematics and I continue to study it. As a result of this devotion to my art, I have had very little taxable income in the course of my career and consequently very little money has accumulated towards social security. As things stand now, if I retire I can look forward to living on $500/month for the rest of my life. I am almost 60 years old. Presently I am living on charitable contributions which exactly cover my expenses. I have no health coverage; apart from one visit to an ear doctor last year and regular dental cleanings, I haven't seen a doctor in years. I once discussed with a social worker whether I could get some support for medical care and it appears that I don't qualify for various reasons. Apart from issues about how much I have in the bank and the schedule under which I get my checks, there seems to be no way to prove that I won't also make money from sources that funding agencies don't know about, such as consulting and tutoring, since I am perfectly capable of doing such work and have done it in recent memory. Anyway, things seems to be arranged in such a way that in order to take advantage of such funding, one has to make a genuine commitment to dependence on it and to configure one's life and finances accordingly. I'm not willing to do that. Charitable contributions are considered gifts and I don't have to pay taxes on them. Therefore they don't contribute to my social security account. That is the problem I would like to deal with. Do I have the option of declaring these gifts as income and paying taxes on them in order to have them contribute to my social security account? I can imagine that the answer might be no. On the other hand, what about the case of someone who spends 8 hours a day panhandling on the streets, or washing windshields at traffic intersections, and accumulates a certain amount of money annually? That person is clearly working and I would think that the money he earns thereby is taxable, if he earns enough, even though it is really charitable on the part of his "clients". To give a more mainstream example, waiters and cab drivers work in part for tips and I think that the tips are taxable, even though they are not part of the contractual arrangement with the client and are arguably charitable contributions. Can someone please clarify the law regarding this? Of course, if I had a job (in the US), the point would be moot, since the job would contribute to social security. But I don't believe I will ever have another job. And, in the unlikely event that someone were to offer me one, I would turn it down if it didn't leave me most of my time free to pursue my scholarly interests as I see fit.

-- Ignorantly, Allan Adler

  • Disclaimer: I am a guest and *not* a member of the MIT
  • CSAIL. My actions and comments do not reflect in any
way on MIT. Also, I am nowhere near Boston. > > > > > > > > > >
Reply to
Allan Adler
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If you are approaching 60 and already have the necessary credits to qualify for social secutiry, I doubt that current contributions would be a good investment. Because your benefit under social security is based on the average of income (adjusted to current dollars) over the 35 highest earning years, any new earnings are unlikely to add significantly to you monthly benefit. In other words, the return on the additional social security tax you would pay would be minimal. You are almost certainly better off putting money in your own retirement savings account, even if not tax deferred, than paying it to social security. I have only done one actual cost/benefit analysis (for myself) but have discussed this matter with many clients. In every case, the return on the investment obviously has been too low to be attractive. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Reply to
L K Williams

You imagine correctly. Filing false returns is, on paper, a crime, as is Social Security benefit fraud, if gov't can prove you willfully filed things this way with IRS. However, these points are moot, as you can only amend the last 3 years to report any unreported income item properly subject to FICA taxes, meaning also reporting in the year of receipt. SSA will not accept SS earnings if the IRS (3-year) statute is barred. Thus, if you did omit genuine FICA income way back, IRS will accept real old, barred, amended returns as voluntary payments, but SSA cannot under law credit them to your earnings record. Also, adding money to your last three years of earnings usually has little effect on your annuity. Fred F.

Reply to
TxSrv

Quick question: when you say you are currently surviving on "charity," what, exactly do you mean? Who's paying it to you, and for what reason(s)?

Reply to
Shyster1040

snipped the original because it was long

Unless you are a recognized charity with 501(c)(3) or similar exempt status, you are not receiving charitable contributions as defined by the IRS. You may be receiving non-taxable gifts or a qualified fellowship. If your concern is adding to your social security income, there are two issues. First, you need 40 quarters over your lifetime to qualify for Social Security payments on retirement. Second, the benefit amount is calculated based on an indexed average of the 35 years with the highest earnings. If you do not have 40 quarters, declaring self-employment income equal to or exceeding the personal exemption amount will garner you four quarters for the year. After self-employment tax and EIC (assuming no dependent children), it's roughly a wash tax-wise in most years. (I've prepared many, many returns for younger, SS-savvy, residence-challenged VITA customers over the years and am assured this works.) This approach probably will not increase your indexed average income and thus your benefit amount. If increasing your benefit is your goal, securing a full-time paid job for the next seven years may be the best approach.

-Crystal

Reply to
pleasedontemailme

When you get money from social security, you're just getting back money that you contributed in the first place, plus whatever it earned since you contributed. You can achieve pretty much the same thing by putting the money you would contribute to SS into savings accounts, CDs, or mutual funds.

-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA

*** PLEASE don't copy me on replies, I'll read them in the group ***
Reply to
Barry Margolin

Thanks very much for answering my questions. The replies were very helpful.

-- Ignorantly, Allan Adler

  • Disclaimer: I am a guest and *not* a member of the MIT
  • CSAIL. My actions and comments do not reflect in any
  • way on MIT. Also, I am nowhere near Boston.

Reply to
Allan Adler

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