Do I need to put retired or "investments" on my tax returns ?

Question

When my cpa helped me get caught up, he put "investments" under occupation. When I filed my 2011 on my own, I put the same.

There is a place for "retired" which one could argue that I am.

Does it matter which I put ?

I have no income other than stock gains (if any) and dividends & interest.

Also, on a slightly different topic, will I still get social security when I get old ?

I haven't been employed by anyone in many years but I was for about 10 years from 20-30. Thus, other than those years I really didn't pay into fica or anything.

I mean both insurance and a check if any ?

I hope that I have enough not to need it and I probably do. Just curious. Its 15 years off.

Its amazing how little one can live on when ones house & car are paid for and one is a tightwad.

Answer 1

"retired" is fine, for occupation or "investments"



Having investment income won't affect what ss you get. But to qualify you have to have paid into ss for 40 quarters, not "about" that long. You might want to check just where yuu stand, and if you're a quarter or 2 short, pick up some kind of job for awhile to close the gap

Answer 2

Although mostly used for statistical purposes, your occupation CAN have an impact on selection for an audit. Been there, done that! Years ago when I was on active duty I filed a return using "mechanic" as my occupation. Because of an extended TDY that lasted nearly 6 months, I had a substantial adjustment for employee business expenses. (This is back when Form 2106 went in as an above the line adjustment as opposed to the current treatment as a 2% miscellaneous itemized deduction on Schedule A.) I was popped for an audit. The audit went fairly smoothly, and I even walked out with an additional refund of $75 as I was unaware of the per-diem rules that worked in my favor. In discussing the matter with the examiner, she noted that if I had put "military" down as my occupation I never would have been audited. High travel expenses are common in the military, not so much for mechanics!



In your case it probably won't make any difference whether you put "investor" or "retired." Both commonly live off of unearned income, retirement pensions, or both.



As to your question about Social Security, you may be in for a rude surprise. Social Security is based upon your high 35 years earnings and you must have 40 paid-in quarters. You've probably got the paid in quarters, but what is going to hurt you is the fact that your earned income was way in the past. Although older income is adjusted for inflation in determining your benefits, it still has a much lesser impact on your benefits than a similar amount of recent income. The other problem is that all of those other 35 years will use $0 for earned income. That can bring your benefits WAY down.



If you've done well enough with your investments and continue to manage them wisely, a low Social Security check may not be a major issue for you. It's primarily intended as a safety net and you may not need much of one due to your circumstances. If you want to increase your benefits, you will have to start supplementing your unearned income with some earned income in the time you have left before you file for SS benefits. You have time to make a significant impact, but those 20 years of $0 earned income are going to hurt you no matter what.

Answer 3

OCCUPATION for this purpose on your 1040 income tax return could be TIGHTWAD or RETIRED if that would be what you want to use instead of investment that your CPA did use for that tax year as your income was from investments ONLY so that was he asked you if that was ok to be used at that time in your life.

When you work and pay Social Security taxes, you earn “credits” toward Social Security benefits.



The number of credits you need to get retirement benefits depends on when you were born. If you were born in 1929 or later, you need 40 credits (10 years of work).



If you stop working before you have enough credits to qualify for benefits, the credits will remain on your Social Security record. If you return to work later on, you can add more credits so that you qualify. We cannot pay any retirement benefits until you have the required number of credits.

How much will your retirement benefit be?



http://ssa.gov/



http://www.socialsecurity.gov/pubs/10035.html#a0=1



You could return to earning some income by performing some type of services and contribute some more years or quarters into the social security trust fund at this time and your life JUST to make sure that you would enough quarters to be able to qualify for the SSB amounts at some future time in your life and in the next 15 years or so for this purpose and time in your life.



FICA retirement (social security benefits) and medicare (insurance payments) are for use in the future when you and some of your survivors qualify for any of the benefits that will be available at some time in your life in the future.

FICA stands for "Federal Insurance Contributions Act." It’s the tax withheld from your salary or self-employment income that funds the Social Security and Medicare programs.

The (OASDI) Old Age Survivor and Disability Insurance (FICA) (social security and Medicare taxes) all mean the same tax for social security benefits (SSB or SSDI). All mean the same thing.

Hope that you find the above enclosed information useful. 10/22/2012

Answer 4

Anyway that describes you if you are disabled quickly and intend to return to work, currently you're disabled if you are retired from employment because of a disability and no longer returning to work, you are retired--more often than not one has a pension to file as revenue and sure in case you have been unemployed for a length of time without probability of returning to work, unemployed does serve

Answer 5

You don't have to put anything in the "occupation" field. It is only for statistical analysis. That is, to keep track of how many taxpayers do what and how much their "median income" is.

Answer 6

because your income is from investments, that seems appropriate call

if you prefer retired, tell him so

Answer 7

What your occupation is currently is really not that important.

Answer 8

I would use the word, "Investor" on my tax return.