The Social Security Administration (SSA) administers many types of social programs. It is independent of the federal government and is the largest social welfare type of program in the United States. In order to qualify for these benefits, United States workers pay a portion of their annual salary to qualify for future benefits.

The US Social Security Administration agency oversees the Social Security Insurance program, founded in 1973 and funded by the general US revenue. The SSA also determines eligibility for participation in the Medicare program. Other programs that the Social Security Administration manages are:

1. Old age, disability insurance and survivors benefits that provide benefits to retired or disabled workers, their spouses and children.

2. SSI program for elderly, disabled and blind individuals. SSI covers approximately seven million persons.

3. The Medicare program, which the Social Security Administration administers, even though it’s the responsibility of the Centers for Medicare and Medicaid Services. SSA has service centers and district offices that help determine eligibility and process premium payments.

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Ensure workers have a Social Security number

An individual receives a Social Security number by the SSA for the purpose of tracking tax issues and were initially issued in November of 1936. In 1986, tax laws mandated that individuals over 5 years of age without Social Security numbers could not be tax dependents on tax returns. Everyone needs a social security number to get a job and to collect benefits offered by Social Security. For tax purposes, businesses require their employees have a valid Social Security card prior to the start of employment.

I recommend: Social Security Online details how someone can obtain a social security number and a social security card. If privacy is a concern, Privacy Rights Clearinghouse addresses common concerns about a person's social security number and privacy. As an employee, you can verify a person's Social Security information using the Social Security Number Verification Service (SSNVS).

Understand Social Security Administration (SSA) basics about future benefits

Any future claim for social security administration benefits depends on the actual amount the individual worker contributed towards Social Security through taxes. Social Security benefits replace a certain amount/percentage of earnings when a person retires, sustains a disability or dies.

I recommend: All working individuals receive a Social Security Statement that helps workers monitor Social Security benefits and what would happen in the event of retirement or disability. For help understanding the Social Security process and how it affects your employees, visit one of your local Social Security Administration office locations.

File social security administration forms necessary for your business

Like many government organizations, proper paperwork and organization is essential when your business works with Social Security Administration offices. Whether you need to file employee reports or disability information, following the right procedure will help save you a lot of potential headache in the future.

I recommend: As an employer, you can file your employee W-2 forms electronically or using paper versions. Employer W-2 Filing Instructions & Information explains what you need to know for both processes. If you submit records relating to a person’s disability, Electronic Records Express details all the information you need to know.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  To prevent the spread of identity theft when filing taxes, use tax software that is password-protected to decrease the chance that someone may hack into tax information and get an employee's social security number.

Business owners, including the self-employed, have several obligations to the US Social Security Administration. Employers must report wages, deduct taxes under the Federal Insurance Contributions Act (FICA) from their employees’ pay, file information about withholdings to the Internal Revenue Service (IRS), and periodically deposit the money withheld.

For businesses that have been around for some time or larger companies, dealing with the Social Security Administration Agency is nothing new. But new business owners may be entering uncharted waters. Also, laws for the self-employed and restaurant owners with employees who are earning tips vary a little.

Fortunately, the technological age has made it is easier to access forms and information, saving you trips or phone calls to the Social Security Administration Offices. That leaves you time to take care of your business and saves you some stress.
It is important to know that:

1. SSA paperwork is time-consuming and stressful for new business owners.
2. Restaurant owners must depend on employees to honestly report tips.
3. The self-employed have obligations to the SSA as business owner and employee.

Action Steps
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Take advantage of the official SSA Business Suite Online (BSO)

The SSA government site has extensive online services for business owners.

I recommend: The BSO Suite of Services gives an overview of the services offered online. You can check submission and report status, acknowledge a notice requesting you to resubmit your wage file, verify social security numbers for employees, and more. Explore the BSO software with this trial demonstration. If you like the tools the BSO has to offer, get started by registering.

Learn strategies for keeping track of employees' tips

The SSA holds business owners accountable for accurately reporting tips and paying their portion.

I recommend: Review these three pointers from the Restaurant Resource Group on reporting tips and paying your portion of FICA to the Social Security Administration Agency. Download IRS Publication 1244. This PDF is a form, along with instructions, for keeping track of your employees’ daily record of tips. You can make copies of this form and keep it for tax purposes.

Get organized with a tax calendar and find answers to your questions on self-employment

The self-employed can avoid penalties by making FICA payments on time, and this IRS calendar gives you deadlines you need to remember.

I recommend: The IRS has put together a calendar that you can download to your computer in order to help you remember important deadlines. The SSA also has helpful answers to the most common questions that business owners have, including the self-employed.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  All business owners can benefit from the BSO. Time is money, and you can spend your time better than waiting in the Social Security Administration Offices to get answers to questions, forms and reports that you can access online simply by registering.
• •  Check the frequently asked questions and BSO websites periodically for changes in laws, and sign up to receive emails when you register.

The Social Security Administration (SSA) is a separate agency within the United States Federal Government which administers the social insurance program called "Social Security". This program processes benefits associated with disability, retirement and benefits for survivors. Most people who work pay toward social security in the form of a tax withheld from earnings, which then qualifies the worker to receive future benefits based on the person's contributions.

The US Social Security Administration offers much more than just retirement benefits. The Social Security Administration agency administers benefits in this fashion.

1. When an individual works, a certain portion of the wage goes into Social Security in the form of taxes.

2. These taxes are used to pay benefits to those who have retired, become disabled, and/or to the families of those who have died.

3. The money paid into the taxes is not put into a personal account for workers to use, but is used to pay for those currently receiving benefits. Any unused portion streamlines to SSA trust funds for disability pay, Medicare, SSI and vocational rehab.

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Obtain information on the Social Security Administration benefit programs

Social Security is a social-based insurance program, instead of an investment plan, so the beneficiary receives benefits as long as necessary.

I recommend: To gain a full understanding of the benefit system and the way to navigate through it, Social Security Administration offices have a handbook of these services. This is at Social Security Online as well as at SeniorJournal.com and helps when working with the Social Security Administration benefit program's requirements.

Determine the right timing to take your social security benefits

Taking social security benefits before full retirement age means you receive a reduced benefit for life compared to those who wait until the Social Security Administration deems their full retirement age. Holding out until age 70 will bring in an even bigger monthly check for those who can continue to safely work.

I recommend: According to US News and World Report, continuing to work without claiming your SSA benefit can increase monthly earnings. Although many retirees don’t have the financial ability to put off Social Security benefits, those who do have this flexibility need to assess the trade-off of receiving benefits for a greater number of years versus the cost permanent reduced monthly benefits. Visit the Statistical Compilations page and download the SSA table to help you make an informed decision in regards to this important financial issue.

Become knowledgeable of all the changes within the benefit structure of Social Security

Every year, there are changes that occur in the Social Security program which happen without any type of legislation, such as the cost-of-living adjustment (COLA). The increase in the Social Security payroll tax depends on the amount of earnings of the individual and the amount exempt using the test concerned with the individual's retirement age.

I recommend: To understand the many changes that can occur in the social security information and benefits issues, New York Life has detailed information regarding these changes and their implication on beneficiaries. A concise history of changes that have occurred in the Social Security system is at the CPA Journal, which delineates the many changes over time as well as the current changes and how they affect social security administration benefits.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  It is important to check the annual estimate of SSA benefits to assure that the earnings history is correct. If something appears to be wrong, contact the social security administration office to have the inaccuracies corrected.

The Social Security Administration is responsible for overseeing and managing programs that provide financial benefits to working U.S. citizens. As a business owner, it's important to be aware of the programs available for your employees and your requirements in regard to how much to deduct from each employee's payroll check, what benefits they are eligible for, and what you need to report to SSA.

Knowledge of the following terms will assist you in your payroll processes in order to meet SSA regulations.

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Social security

Social security is the broad term for the range of benefits offered by the federal government to workers with US citizenship. The main benefits the SSA provides are classified as survivors, disability and retirement.

I recommend: Get more information on social security from ForeignBorn, including the taxes employees face and how the SSA uses the money.

Medicare

Medicare, overseen by the SSA, consists of the health insurance benefits provided to most individuals age 65 and over. There are four parts. Part A is hospital insurance, Part B is medical insurance, Part C is the Medicare Advantage program and Part D is prescription coverage.

I recommend: Solutions for Seniors and the Social Security Administration provide more details about Medicare, including explanations of each part.

SSDI

SSDI stands for Social Security Disability Insurance. Individuals receive these benefits if they worked in the United States, suffered an injury and are unable to work because of that injury for a year or more.

I recommend: Visit the FirstStep website for more information on SSDI.

Form W-2

Form W-2 is an IRS tax form that all employers must file each year for each employee who had federal, state, social security and/or Medicare taxes withheld from his or her earnings. Employers must send a copy of the W-2 for each employee to the SSA.

I recommend: RealTaxTools helps with common W-2 errors and other items that you should be aware of.

FICA

FICA stands for the Federal Insurance Contributions Act of 1939 and refers to the income taxes withheld from an employee's earnings that go toward social security benefits.

I recommend: Visit Money-zine for a breakdown of FICA as well as past and current FICA tax rates.

COLA

COLA stands for cost of living adjustment. In regard to the SSA, the COLA is an annual increase in social security tax rates in order to reflect inflation. There is no law or enactment that must meet approval in order for the COLA to be put into effect each year, it is just an automatic adjustment based on COLA calculations.

I recommend: SeniorArk provides information on how COLA is calculated and what it is.