Full Version: Should you get a Social Security Number for your kids?
As a relatively new parent, I've learned many things. One of the more surprising things that I've learned is that you do NOT have to get your children Social Security numbers after they are born. This revelation has led to many more questions that I haven't had time to find answers to. Knowing that the SS system is going broke though, why would I submit my kids to a 6.2% tax that they'll never see again? There are other benefits to a SSN, such as:
if my children do not have one, I can't claim them on my income taxes(is a couple of grand for myself worth enslaving them to the elderly for their entire lives?).
you have to have one to work for the federal government (but they could apply later if that were the case).
you have to have one to buy US savings bonds.
you have to have on for government services such as Temporary Assistance to Families (TANF), Food Stamps and Medicaid.
After thinking all of these options through (and with the knowledge that once you have a number, you can't cancel it), I have to wonder - Should we leave the decision to get Social Security number to our children? What advantages are we taking away from them by waiting? Is getting a Social Security number so inevitable, that we should just go along? Knowing this, are you upset that your parents got you one?
if my children do not have one, I can't claim them on my income taxes(is a couple of grand for myself worth enslaving them to the elderly for their entire lives?).
you have to have one to work for the federal government (but they could apply later if that were the case).
you have to have one to buy US savings bonds.
you have to have on for government services such as Temporary Assistance to Families (TANF), Food Stamps and Medicaid.
After thinking all of these options through (and with the knowledge that once you have a number, you can't cancel it), I have to wonder - Should we leave the decision to get Social Security number to our children? What advantages are we taking away from them by waiting? Is getting a Social Security number so inevitable, that we should just go along? Knowing this, are you upset that your parents got you one?
As you've mentioned, you must have a card to claim a child as a dependant.
Notice the section for Exemptions of IRS Form 1040. The same goes for form 1040A. If you want to claim a child as a Dependant you must supply a Social Security number.
http://www.irs.gov/pub/irs-pdf/f1040.pdf
The exemption amount for 2006 was $3330.00. That's 3300 pretty good reasons to get a card for the child. The amount is adjusted for inflation and goes up each year.
http://taxes.about.com/b/a/214950.htm
There is a good chance the child may not get a job without a card when they are ready to go to work - evenj for a part-time job. I don't know how they do it now, but when I was in college at UNT, the Social Security number served as the student number. That may have changed becaue of identity theft. People don't have to pay (and start earning quarter) until they start working. There may be some projected negatives, but I don't see any real ones.
Notice the section for Exemptions of IRS Form 1040. The same goes for form 1040A. If you want to claim a child as a Dependant you must supply a Social Security number.
http://www.irs.gov/pub/irs-pdf/f1040.pdf
The exemption amount for 2006 was $3330.00. That's 3300 pretty good reasons to get a card for the child. The amount is adjusted for inflation and goes up each year.
http://taxes.about.com/b/a/214950.htm
There is a good chance the child may not get a job without a card when they are ready to go to work - evenj for a part-time job. I don't know how they do it now, but when I was in college at UNT, the Social Security number served as the student number. That may have changed becaue of identity theft. People don't have to pay (and start earning quarter) until they start working. There may be some projected negatives, but I don't see any real ones.
QUOTE(BoF @ Jun 12 2007, 10:01 PM) 
The exemption amount for 2006 was $3330.00. That's 3300 pretty good reasons to get a card for the child. The amount is adjusted for inflation and goes up each year.
http://taxes.about.com/b/a/214950.htm
http://taxes.about.com/b/a/214950.htm
Right. Exemptions just mean the money isn't taxed though right? So depending on your bracket, that's anywhere from $0-$1200 a year that you're sacrificing that could be used on the kids.
I'm not sure how the job thing works. I think that they could get an ITIN (individual tax identification number) from the IRS that would allow them to have the rights of any other US citizen to work. I'm curious how that effects the employer though. Would the company not have to pay into the system? I find that hard to believe or they would encourage no one to get one.
In the 1990s, I worked part-time for H & R Block. In cases where people did contract work - no withholding, no FICA or Medicare taxes taken out, the individual taxpayer had to pay income tax and both the employer and employee portion of FICA and Medicare. I saw some huge train wrecks as a result of this.
Things may be a little different, I don't know. Maybe one of our "business types" like Amlord, could give you a more comprehensive answer.
You are correct about the deduction being from income, not a dollar-per-dollar amount, as in a tax credit. In some case it might impact your marginal bracket.
Things may be a little different, I don't know. Maybe one of our "business types" like Amlord, could give you a more comprehensive answer.
You are correct about the deduction being from income, not a dollar-per-dollar amount, as in a tax credit. In some case it might impact your marginal bracket.
I find it pretty strange that your SS system would want to allocate the newborn with a number anyway - isn't that what a birth certificate is for?
In the UK, people get allocated a National Insurance number (our equivalent) at age 16, not before, if they are a resident. And those who come to the country after that age will need to apply for one.
Under-16s do not get one, because under 16s do not work full time (and cannot legally do so), and it's the payment of National Insurance tax from taxpayers, and payment of pensions and other welfare benefits to claimants that are being regulated by the NI number. Child benefits are paid to the parents, not the children, so it's the parents whose records need to be in order to make a claim, not the children.
Why does the American Social Security system need children to have a number at all?
In the UK, people get allocated a National Insurance number (our equivalent) at age 16, not before, if they are a resident. And those who come to the country after that age will need to apply for one.
Under-16s do not get one, because under 16s do not work full time (and cannot legally do so), and it's the payment of National Insurance tax from taxpayers, and payment of pensions and other welfare benefits to claimants that are being regulated by the NI number. Child benefits are paid to the parents, not the children, so it's the parents whose records need to be in order to make a claim, not the children.
Why does the American Social Security system need children to have a number at all?
QUOTE(Julian @ Jun 13 2007, 11:05 AM)
Why does the American Social Security system need children to have a number at all?
My guess is that this all started because the Internal Revenue Service wanted to make sure kids people list as dependants really do exist. I've heard of people trying to claim cats (not a bad idea if you can get away with it) or dogs as dependants or even make up kids with phony SS numbers. With some exaggeation, I would call the period between January 1 and April 15 (tax filing deaadline) the "Great American Cheat-Out.
If the child is going to be climed as dependant, the SS number will be needed by the first birthday. If there is a way to do it at the hospital, it will save trip to the SS office later.
When I was working for Block, it wasn't unusual for someone to show up wanting to have their taxes prepared. They would have a new baby with no SS number. Before we could file the return, if they wanted the exemption, and I can't remember anyone who didn't want it, then they had to go register before we could prepare the return.
Should we leave the decision to get Social Security number to our children? What advantages are we taking away from them by waiting? Is getting a Social Security number so inevitable, that we should just go along? Knowing this, are you upset that your parents got you one?The thrust of this line of questions revolves around avoiding taxes. Let's be honest: Social Security is a tax. It is not insurance, it is not voluntary.
I say this because the Supreme Court ruled in 1935 (the same year the Social Security Law passed) that the Congress had no power to enact a mandatory retirement plan for workers. Railroad Retirement Board v. Alton R. Co., 295 U.S. 330, 55 S.Ct. 758 (1935).
The strange thing is that the inability of the plan to demonstrate long term solvency.
Curious. But the court goes farther:
This despite the fact that the law pertains exclusively to companies (railroads) which are by their very nature intimately involved in interstate transportation. This iruling probably was prominent in FDR's plant to pack the court. It passed by a 5-4 vote. The observation that the very same year a "pension plan" was adopted for all workers in all industries and yet somehow it was Constitutional (presumably on interstate commerce grounds) is quite interesting. At least it has never been ruled un-Constitutional.
The dissent (by the Chief Justice at the time, Charles Evans Hughes, begins with:
Curious to say the least. Again, how the Court allowed a pension plan for all employees yet struck down one specific to railroad employees is curious, especially because it was not denied on equal protection grounds, but on the lack of interstate commerce.
Of course, the difference between the pension plan of the railroad and Social Security is that Social Security is a tax, not an insurance of any kind. The payments made by the SSA are in no way tied to the taxes collected to fund it. The payment into FICA are not voluntary: they are mandatory, as are all taxes. The FICA rate is 12.4% (6.2% by each employer and employee) on all wages earned up to $97,500. The maximum tax is $6,045 per year for each (total tax $12,090 for any wage earner).
Will not having a Social Security number save anybody from paying this tax? Not bloody well likely. If Social Security were an involuntary insurance, it would certainly be un-Constitutional on its face. But it is not. It is a tax and everyone knows that you must pay your taxes.
So get your kid a SS card so you can not only take the exemption, but the child credit (currently a credit of $1000 per child). Your taxes will decrease by about $2000 ish per year for the 18 years they are eligible. Also, their child care (if any) is deductable under many circumstances. But only if they have a SS number.
I say this because the Supreme Court ruled in 1935 (the same year the Social Security Law passed) that the Congress had no power to enact a mandatory retirement plan for workers. Railroad Retirement Board v. Alton R. Co., 295 U.S. 330, 55 S.Ct. 758 (1935).
The strange thing is that the inability of the plan to demonstrate long term solvency.
QUOTE
The act is said to be unconstitutional because unreasonably and unconscionably burdensome and oppressive upon the respondents, and we are referred to a finding of the court below to which petitioners do not assign error. [295 U.S. 330, 361] The facts as found are: Based upon present pay rolls, the carriers' contributions for the first year will aggregate not less than $60,000,000; at the rates fixed in the act, total employee and carrier contributions will, on the basis of present pay rolls, be approximately $90,000,000 per year; unless the amount of the contributions is increased by the Board, the drain on the fund for payment of pensions will result in a deficit of over $11,000,000 by the year 1942. To keep the fund in operation, it will be necessary for the Board to increase the percentages of contributions named in the act. The petitioners' actuary testified that in the tenth year of operation the payments from the fund will be upwards of $137,000, 000. The railroads' total contribution to pensions on account of prior service of employees in service at the date of the act may amount to $2, 943,966,000. We are not prepared to hold that, if the law were in other respects within the legislative competence, the enormous cost involved in its administration would invalidate it; but the recited facts at least emphasize the burdensome and perhaps destructive effect of the contraventions of the due process of law clause which we find exist. Moreover, they exhibit the inconsistency of the petitioners' position that the law is necessary because in times of depression the voluntary systems of the carriers are threatened by loss of revenue. It is difficult to perceive how the vast increase in pension expense entailed by the statute will, without provision of additional revenue, relieve the difficulty experienced by some railroads in meeting the demands of the plans now in force.
Curious. But the court goes farther:
QUOTE
It results from what has now been said that the act is invalid because several of its inseparable provisions contravene the due process of law clause of the Fifth Amendment. We are of opinion that it is also bad for another reason which goes to the heart of the law, even if it could survive the loss of the unconstitutional features which we have discussed. The act is not in purpose or effect a regulation of interstate commerce within the meaning of the Constitution.
Several purposes are expressed in section 2(a), of the act (45 USCA 202(a), amongst them: To provide 'adequately for the satisfactory retirement of aged employees'; 'to make possible greater [295 U.S. 330, 363] employment opportunity and more rapid advancement'; to provide by the administration and construction of the act 'the greatest practicable amount of relief from unemployment and the greatest possible use of resources available for said purpose and for the payment of annuities for the relief of superannuated employees.' The respondents assert and the petitioners admit that though these may in and of themselves be laudable objects, they have no reasonable relation to the business of interstate transportation.
Several purposes are expressed in section 2(a), of the act (45 USCA 202(a), amongst them: To provide 'adequately for the satisfactory retirement of aged employees'; 'to make possible greater [295 U.S. 330, 363] employment opportunity and more rapid advancement'; to provide by the administration and construction of the act 'the greatest practicable amount of relief from unemployment and the greatest possible use of resources available for said purpose and for the payment of annuities for the relief of superannuated employees.' The respondents assert and the petitioners admit that though these may in and of themselves be laudable objects, they have no reasonable relation to the business of interstate transportation.
This despite the fact that the law pertains exclusively to companies (railroads) which are by their very nature intimately involved in interstate transportation. This iruling probably was prominent in FDR's plant to pack the court. It passed by a 5-4 vote. The observation that the very same year a "pension plan" was adopted for all workers in all industries and yet somehow it was Constitutional (presumably on interstate commerce grounds) is quite interesting. At least it has never been ruled un-Constitutional.
The dissent (by the Chief Justice at the time, Charles Evans Hughes, begins with:
QUOTE
I am unable to concur in the decision of this case. The gravest aspect of the decision is that it does not rest simply upon a condemnation of particular features of the Railroad Retirement Act (45 USCA 201-214), but denies to Congress the power to pass any compulsory pension act for railroad employees.
Curious to say the least. Again, how the Court allowed a pension plan for all employees yet struck down one specific to railroad employees is curious, especially because it was not denied on equal protection grounds, but on the lack of interstate commerce.
Of course, the difference between the pension plan of the railroad and Social Security is that Social Security is a tax, not an insurance of any kind. The payments made by the SSA are in no way tied to the taxes collected to fund it. The payment into FICA are not voluntary: they are mandatory, as are all taxes. The FICA rate is 12.4% (6.2% by each employer and employee) on all wages earned up to $97,500. The maximum tax is $6,045 per year for each (total tax $12,090 for any wage earner).
Will not having a Social Security number save anybody from paying this tax? Not bloody well likely. If Social Security were an involuntary insurance, it would certainly be un-Constitutional on its face. But it is not. It is a tax and everyone knows that you must pay your taxes.
So get your kid a SS card so you can not only take the exemption, but the child credit (currently a credit of $1000 per child). Your taxes will decrease by about $2000 ish per year for the 18 years they are eligible. Also, their child care (if any) is deductable under many circumstances. But only if they have a SS number.
QUOTE(Amlord @ Jun 13 2007, 03:11 PM)
Should we leave the decision to get Social Security number to our children? What advantages are we taking away from them by waiting? Is getting a Social Security number so inevitable, that we should just go along? Knowing this, are you upset that your parents got you one?The thrust of this line of questions revolves around avoiding taxes. Let's be honest: Social Security is a tax. It is not insurance, it is not voluntary.
That is my whole thing though. It technically IS voluntary. If it's a tax that everyone has to pay, then why on earth do they give you the option to get a number? The only logical answer that I can find is that there is a loophole somewhere for the in the know to take advantage of. There seem to be so many various disadvantages though, that I don't see it (which is why I did go ahead and get them numbers, but I'm not sure I'll do it again for the next one). The point is, should I be forcing my kids into this system? Just doesn't feel very American to me.
QUOTE(Amlord @ Jun 13 2007, 03:11 PM)
Will not having a Social Security number save anybody from paying this tax? Not bloody well likely. If Social Security were an involuntary insurance, it would certainly be un-Constitutional on its face. But it is not. It is a tax and everyone knows that you must pay your taxes.
Thanks for the insight as to why it may technically be a voluntary system. Your wording here loses me though. A SSN is technically not forced like you say. You call it tax. I call it(technically) voluntary insurance. "Not bloody well likely" to me means that you're not sure that there isn't a loophole either. I've known foreigners working in the US (legally) who didn't pay FICA.
Is getting a number inevitable? I'm not so sure anymore. Can you work without one? I'm pretty sure that you can. Can you invest without one? Not sure. When buying some stock for my kids (regular stock, no IRA or ESA or any other special account involved) I tried this out. I said that they didn't have SSN's and the guy was saying that they couldn't open an account for them then. I persisted because I was curious and he conceded that he could open an account, but the IRS would take "something like" 25-35 percent of it upfront as part of some homeland security law. He couldn't point me to the law or IRS code and I have yet to find it. I called the IRS about it too and got the biggest runaround you've ever seen. Talked to 5 different people and not one would give me a straight answer about if such a law existed or the consequences of no SSN in general. This digging is frustrating but the more I dig, the more I'm convinced that there is a way out.
QUOTE(Just Leave me Alone! @ Jun 15 2007, 10:50 PM)
Is getting a number inevitable? I'm not so sure anymore. Can you work without one? I'm pretty sure that you can. Can you invest without one? Not sure. When buying some stock for my kids (regular stock, no IRA or ESA or any other special account involved) I tried this out. I said that they didn't have SSN's and the guy was saying that they couldn't open an account for them then. I persisted because I was curious and he conceded that he could open an account, but the IRS would take "something like" 25-35 percent of it upfront as part of some homeland security law. He couldn't point me to the law or IRS code and I have yet to find it. I called the IRS about it too and got the biggest runaround you've ever seen. Talked to 5 different people and not one would give me a straight answer about if such a law existed or the consequences of no SSN in general. This digging is frustrating but the more I dig, the more I'm convinced that there is a way out.
There is another option.
When I worked at Block, I was competent to file tax returns, apply for refund anticipation loans, etc.
They had a series of five courses. I only took the first. After the fifth course, one could apply to become an enrolled agent. This did not make them CPAs, although many of them imagined that they were better.
If this is such a big issue, I would suggest that you find a competent CPA.
QUOTE(Just Leave me Alone! @ Jun 11 2007, 11:17 PM)
As a relatively new parent, I've learned many things. One of the more surprising things that I've learned is that you do NOT have to get your children Social Security numbers after they are born. This revelation has led to many more questions that I haven't had time to find answers to. Knowing that the SS system is going broke though, why would I submit my kids to a 6.2% tax that they'll never see again? There are other benefits to a SSN, such as:
if my children do not have one, I can't claim them on my income taxes(is a couple of grand for myself worth enslaving them to the elderly for their entire lives?).
you have to have one to work for the federal government (but they could apply later if that were the case).
you have to have one to buy US savings bonds.
you have to have on for government services such as Temporary Assistance to Families (TANF), Food Stamps and Medicaid.
After thinking all of these options through (and with the knowledge that once you have a number, you can't cancel it), I have to wonder - Should we leave the decision to get Social Security number to our children? What advantages are we taking away from them by waiting? Is getting a Social Security number so inevitable, that we should just go along? Knowing this, are you upset that your parents got you one?
if my children do not have one, I can't claim them on my income taxes(is a couple of grand for myself worth enslaving them to the elderly for their entire lives?).
you have to have one to work for the federal government (but they could apply later if that were the case).
you have to have one to buy US savings bonds.
you have to have on for government services such as Temporary Assistance to Families (TANF), Food Stamps and Medicaid.
After thinking all of these options through (and with the knowledge that once you have a number, you can't cancel it), I have to wonder - Should we leave the decision to get Social Security number to our children? What advantages are we taking away from them by waiting? Is getting a Social Security number so inevitable, that we should just go along? Knowing this, are you upset that your parents got you one?
My kids were issued SS cards at birth and I believe there is little choice in the matter.
I think one would have a good deal of trouble working without having a SS number.
I believe that you cannot work in the United States if you do not have a Social Security number.
Every employer is required to report each employee's income to the IRS using the SS number. If you do not have a number, you need a document from the SSA saying that you are in the process of getting one. A SS number is, in effect, a permit to work. It is not mandatory to have one, but without one, you cannot be employed.
Social Security is a TAX. Don't think so? Let's ask the IRS: Taxes in the US: Lesson 4 Social Security Act of 1935
I rest my case. Save yourself the trouble and just get the number.
Every employer is required to report each employee's income to the IRS using the SS number. If you do not have a number, you need a document from the SSA saying that you are in the process of getting one. A SS number is, in effect, a permit to work. It is not mandatory to have one, but without one, you cannot be employed.
Social Security is a TAX. Don't think so? Let's ask the IRS: Taxes in the US: Lesson 4 Social Security Act of 1935
QUOTE
At first, payments into Social Security were considered "contributions," not taxes. The program appeared to be self-funded--as workers contributed, they received credits toward retirement benefits. However, too many people needed help, so the program was expanded to include the families and survivors of retired and disabled workers, the unemployed, and federal workers.
Today, Social Security provides a regular income to retired and disabled workers and the unemployed. Social Security is funded by a compulsory payroll tax called the Federal Insurance Contributions Act (FICA) tax. The payroll tax is withheld from each paycheck. Withholding means that an employer deducts, or holds back, a set amount of money and sends it to the government. Workers pay the tax as they earn their incomes. This system is known as "pay-as-you-go" or "pay-as-you-earn." Workers' payroll taxes support those who are currently receiving Social Security benefits.
Today, Social Security provides a regular income to retired and disabled workers and the unemployed. Social Security is funded by a compulsory payroll tax called the Federal Insurance Contributions Act (FICA) tax. The payroll tax is withheld from each paycheck. Withholding means that an employer deducts, or holds back, a set amount of money and sends it to the government. Workers pay the tax as they earn their incomes. This system is known as "pay-as-you-go" or "pay-as-you-earn." Workers' payroll taxes support those who are currently receiving Social Security benefits.
I rest my case. Save yourself the trouble and just get the number.
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