Grossing Up Social Security Income— Here’s Everything You Need to Know!

Social Security beneficiaries are grossing up Social Security income on financial paperwork. In this article, read and find out more about what grossing up means and how it works!

Beneficiaries of the Social Security Administration can be grossing up Social Security income on financial paperwork. Grossing up Social Security income is done to make income more accurately indicate the earned income. This is because the accurate amount of earned income is needed to qualify for loans or other financial assistance programs.

An article on BambooHR states that grossing up Social Security income means that the income is adjusted to take into account the taxes that must be paid. This means that the net income is adjusted to equal the gross income. Sometimes, payments can be made to gross up the Social Security income. With this method, the payer will compensate for the recipient’s taxes so that the recipient’s net income equals their gross income. Other times, a non-taxable income can be grossed up by adjusting the income when applying for financial assistance such as loans or credit cards. This allows the recipients to indicate their income like how an earned income is presented.

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How Grossing Up Social Security Income Works

According to Reed, one of the most popular examples of non-taxable income is Social Security. Income taxes to be paid range from 0% to 85% of the Social Security income depending on a household’s income. In general, Social Security beneficiaries receive around $19,370 per year from Social Security. This amount is equivalent to earning roughly $23,000 in pretax income.

Beneficiaries who can provide proof of their income can be grossing up Social Security income. This includes several situations like court documents, loan or mortgage applications to tax preparation, and estate planning. With government agencies, it is typically allowed to gross up Social Security earnings by up to 15%.

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