Social Security Benefits

My employer is pushing hard for all employees to open flexible spending accounts to cover the cost of day care and medical care. I know the money I put into these accounts escapes income tax, but how does it affect my Social Security? It might reduce your future Social Security benefits, but don't panic. There's an easy way to offset the damage. Contributions to flexible spending accounts - also known as tax-saver or 125(c) plans - escape income, Social Security and Medicare taxes. That's a big advantage, because it cuts your immediate tax bill while helping you pay for child care or nonreimbursed medical expenses you incur year-round.

Federal Reserve Chairman Alan Greenspan warned Congress and the Bush administration yesterday that Social Security benefits should be cut to avert serious economic problems from a ballooning budget deficit. "The dimension of the challenge is enormous," Greenspan said on Capitol Hill to members of the House Committee on the Budget. "The resolution of this situation will require difficult choices, and ... the future performance of the economy will depend on those choices." Greenspan indicated that he is in favor of making the Bush administration's sweeping tax cuts permanent despite the rising deficits because raising taxes could "pose significant risks to economic growth and the revenue base."

The Association of Community Services has announced the recipients of the 2011 Audrey Robbins Humanitarian Awards, who will be honored in a ceremony later this month. The annual awards recognize individuals and groups who have "performed services above and beyond the call of duty" in the Howard County community, according to the organization. This year's winners are: • Volunteer of the Year: Don Bard, who helps provide access to computers to local students and their families who could not otherwise afford them through his Lazarus Foundation.

WASHINGTON - President Bush will soon unveil a plan allowing younger workers to divert some portion of their Social Security payroll taxes into personalized retirement accounts. The unanswered $2 trillion question is, How will we finance the transition costs? Mr. Bush said categorically, "We will not raise payroll taxes to solve this problem." That's a welcome relief to the great majority of working Americans who pay more in payroll than income taxes. But given that the White House also opposes benefit cuts for retirees and those nearing retirement, how long can the "no new payroll taxes" promise be kept?

Traffic lines are needed for light rail safetyIs it going to take a fatality before the proper authorities take action and paint bright yellow diagonal lines (signifying "do not encroach") across the light rail right of way at the intersection of Howard and Pratt? Many cars each day stop for red lights on the tracks. Confrontations between light rail trains and these cars are common. The simple, cheap solution: the painted lines, and a prominent warning sign along or above eastbound Pratt.

JUST HOW far can federal workers go in expressing their political views in the workplace during a highly charged presidential campaign? An administrative law judge ruled this month that two Social Security employees did not violate the law when they forwarded e-mails on government time and computers for or against former presidential candidate John Kerry last year. Administrative Law Judge Arthur J. Amchan's April 14 ruling states that the borrowed content of the e-mails and their limited audiences amounted to "water-cooler"-type discussions or "face-to-face expressions of personal opinion" that did not violate the Hatch Act. That law prohibits taxpayer money from paying for political activities and federal employees from doing partisan work on taxpayers' time.

WASHINGTON -- A bipartisan election year consensus seems to be building to finally repeal a Depression-era penalty on Social Security recipients who keep working after age 65. President Clinton has already agreed to sign a bill scheduled to begin moving through the House today that would remove the penalty affecting about 700,000 older Americans who still want, and perhaps need, to work. If enacted, the measure would take effect as of Jan. 1 this year, saving workers ages 65 to 69 hundreds, perhaps thousands of dollars this year.

Caned youth got treatment he deservedThe U.S. teen-ager who spray-painted cars was punished with four lashes from a rattan cane in Singapore. His mother says he just doesn't understand why this is happening to him: He is very scared and is depressed.First, she might explain to him that there are laws and when those laws are broken there is a price to pay.Second, he wasn't scared when he disfigured the cars.And third, perhaps he should realize that the owners of those cars were also depressed not only by what happened to their cars but also by the trouble it caused them.

WASHINGTON -- Six weeks before they face the possibility of substantial losses in congressional elections, Democrats held a hearing yesterday to talk about the politically charged issue of raising Social Security taxes or cutting benefits to keep the system solvent.The hearing focused on several bills designed to strengthen the condition of the Social Security trust fund, which finances pensions and disability benefits for 42 million Americans, using taxes collected from 135 million workers.

Each Wednesday through April 21, baltimoresun.com's tax experts will answer your questions this tax-filing season. Our experts are Jim Dupree of the Maryland office of the Internal Revenue Service in Baltimore and, this week, Nicole M. Harrell, head of her own accounting firm in Baltimore. To be included next week, please use the form at the right side of this page to submit your questions. What is the proper tax treatment for a domestic employee? I have someone close to me (the employee)