Do I need to pay tithing on social security payments when I already paid while working?

Question

Gramps,

We have always paid our tithing on our income before deductions – now we are living on our social security – we’ve already paid tithing on that when we were employed – so now do we play tithing on it again?

JoAnn

Answer

JoAnn,

Tithing and how it should be paid is personal and is between an individual and the Lord.  Ultimately, whatever you and your husband feel you should do is exactly what you should do.  That said, because you inquired, I will gladly share with you this gramps’ opinion on the most effective way to tithe as it pertains to Social Security Income.

Because of the fact that you paid tithing on your gross income and did not deduct Social Security Taxes from your total income to be tithed, one of the following things is likely to occur:

1.  You will eventually receive more from Social Security than what you paid in and will technically be responsible to the Lord to begin tithing again.  But how will you know when?
2.  You will die before receiving back enough Social Security Benefits to recuperate the tithing paid in, and as a result, will have paid more in tithing than the Lord will have required.
3.  You will pay tithing on your SS income from the beginning and so will be paying double tithing on some of that money, which is also more than the Lord requires of you.

Specifically in order to avoid this conundrum, I feel it is most appropriate to not pay tithing on the portion of income that goes to Social Security Taxes.  Then, if one collects Social Security Benefits at retirement (or any other point in their life), they would pay tithing on it from the start and will never have to wonder at this question.

The problem is, it is far too late for you to follow this counsel.  The good news is that there is a way to determine the point when you will receive back more from Social Security than you paid in, which you might use as a method to determine when you would begin tithing that source of income.

First you must gather some information from the Social Security Administration.  You could contact their office, or register and log in to the My Social Security website.  From there you should be able to get a list of all the years you paid Social Security Taxes as well as the total amount paid.

For example, let’s assume that the total combined amount paid in to the Social Security Administration in was $93,417. With this information you have two options, (both of which will require you to track the total income you receive from Social Security over the years):

1.  Use a simple method and do not pay tithing on the first $93,417 of total income you receive.  After receiving that amount start paying again.
2.  Determine the actual value of the money paid in, and what would be the equivalent dollar amount today.

If you choose option two, you will have some math to do, but there are many wonderfully helpful inflation calculators (such as this one) to help you.  Here is an example of how you could use it:

Jim paid $1526 in SS Taxes in 1950.  Using this inflation calculator, Jim determines that his $1500 in 1950 would be the same as $15,694 in today’s money.  Therefore, if Jim already paid tithing on the $1526 in 1950, he could justly choose to not pay tithing on the first $15,694 he receives, as they are of equivalent value.

In 1951, Jim paid $1535 in Social Security Taxes, using the same tool, he determines that it would be equal to $14,633 in today’s money.  Jim adds the equivalent values of $15,694 and $14,633 to determine that he will not pay taxes on the first $30,327 he receives.

Following this example, one would continue adding the values in today’s dollars for every year and every contribution, and after adding them all, would be able to determine the maximum amount of income they could receive without paying tithing.  Then they would be responsible to keep track and begin paying tithing at the appropriate time.

As you determine what is right for you, always keep in mind these words of the Lord as declared by the prophet Malachi:

“Bring ye all the tithes into the storehouse, … and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it.” (Malachi 3:10)

With all these examples and options being shared, please keep in mind that the Lord will certainly not be upset should you make a decision that results in paying excess tithes.  You and your spouse must determine what is right between you and the Lord in sincere pondering and humble prayer.  Once you feel at peace with your choice, move forward and follow through with it.

Gramps