Self-Employment and Social Security

August 29, 2019 • By

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Last Updated: August 29, 2019

" "Many people enjoy the independence of owning and operating their own small business. If you’re a small business owner, you know that you have additional financial responsibilities when reporting your taxes. A part of this is paying into Social Security. 

Most people who pay into Social Security work for an employer. Their employer deducts Social Security taxes from their paycheck, adds a matching contribution, then sends those taxes to the Internal Revenue Service (IRS) and reports the wages to Social Security. Self-employed people must do all these actions and pay their taxes directly to the IRS.

You’re self-employed if you operate a trade, business or profession, either by yourself or as a partner. You report your earnings for Social Security when you file your federal income tax return. If your net earnings are $400 or more in a year, you must report your earnings on Schedule SE, in addition to the other tax forms you must file.

You must have worked and paid Social Security taxes for a certain length of time to get Social Security benefits. The amount of time you need to work depends on your date of birth, but no one needs more than 10 years of work (40 credits).

In 2019, if your net earnings are $5,440 or more, you earn the yearly maximum of four credits — one credit for each $1,360 of earnings during the year. If your net earnings are less than $5,440, you still may earn credit by using an optional method described below.

We use all your earnings covered by Social Security to figure your Social Security benefit, so, report all earnings up to the maximum, as required by law.

Family members may operate a business together. For example, a husband and a wife may be partners or run a joint venture. If you operate a business together as partners, you should each report your share of the business profits as net earnings on separate self-employment returns (Schedule SE), even if you file a joint income tax return. The partners must decide the amount of net earnings each should report (for example 50 percent and 50 percent).

You can read more about being self-employed and how that affects your Social Security benefits including optional methods of reporting.

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About the Author

Mike Korbey, Deputy Commissioner for Communications

Mike Korbey, Deputy Commissioner for Communications


  1. tony

    The State DDS uses the expedited Step 5 denial process to deny self employed people their disability benefits. The expedited Step 5 can only be done after Step 3. The DDS must fully develope the medical records at Step 3.

    The State DDS motto is quantity and not quality. This is why they have a problems with the CE exams in Tennessee.

    Make findings of fact; do not merely summarize evidence. POMS DI 26515.001

  2. tony

    The State DDS are not following SSA regulations. They are using SSA-4734-F4-SUP form to assess Creteria B of the Mental Disorder Listings 12.00.

    The Criteria B is used to see if they meet the medical listing, while SSA-4734-F4-SUP form is used for the assessment of the RFC to see if they have a substantial loss in mental demand of unskilled work.

    There should be a form for the four areas of Criteria B of the Mental Disorder Listing . It should list the activities under each of the four sections like the RFC form(SSA-4734-F4-SUP). Then the MC/PC has to rate it none, mild, moderate, marked, or extreme.

    The State DDS need to perform this assessment form required by SSA regulations. It should be in their case file, so the claimant or their representative can dispute the findings of fact. The ALJ can’t use care for pets, watch TV, go to church, etc to deny the claimant at step 5. These activities are to deny them at Step 3.


    I have tried everything that I’ve tried to remember but it’s not enough time or it’s not working because I live with my parents and everything that I have done here is a lot but everything that I’ve tried to remember for me is hard and my doctor has sent you things that say that I am disability and my medical Records are @ St. Marys Hospital & Cabell Huntington Hospital & I am so handicapped I cannot remember how much I have to do to try to get help with my social security disability benefits! And I deserve everything that I am entitled To as a USA citizen! But I don’t say anything right & now because I cannot remember everything that I needed to remember you have told me that I am unable to receive my disability benefits and I cannot believe that I have tried everything that I know or can remember & it didn’t matter but it’s not fair to cut me off and not send me my disability benefits because I have paid for everything & I don’t have any more money or time to keep this up ! I need to know what I need to have to get my social security disability benefits because I am physically and mentally handicapped and being so abused by everyone that I was married to & everyone else who doesn’t like me! And I am sorry for saying everything that I am saying but it’s ridiculous to keep saying or doing this every single day! And I am about to just call the i inspector general of the Social Security administration and ask him or her what to do because you all aren’t getting anything done but analyzing I haven’t worked in over 10 years or less and that’s not right after working 30 years and or 40 years and paying into this and not being able to receive anything is unimaginable and I need help and I am going to call them on Monday so whatever you can do Would be appreciated !

  4. tony

    The SSA should force those claimants waiting on an ALJ hearing to participate in the State’s vocational rehabilitation program while they wait.

    Vocational rehabilitation is mandatory unlike Ticket-To-Work. Since the claimants are not receiving SSDI/SSI benefits, the SSA doesn’t have to pay the State’s rehabilitation services anything.

    The SSA can reduce the claimant’s payment for every month they don’t participate.

    The ADA law requires all employers to accommodate a qualified disabled person. They can sign up for jobs with the State’s Vocational Services even if the job is not available to them now. This is why we have the ADA employment discrimination laws.

  5. lesly f.

    My ages claim is pending from social security, if I’m wen i will start a to sale something’s to be serlf employed ! Because i am 65 years old elderly disable !

  6. About C.

    Thank for this comment section and your willingness to answer back. – (Kenny O., Public Affairs Specialist)

    You all have a good day!

  7. Stephen L.

    I believe that I am involved in some kind of corporation and believe large amount is on I find out what is going on with irs

  8. iranod32

    it a good idea….

  9. Kathy A.

    I was on SS Disability and turned 66 years of age on 7/17/2019. I got a letter saying that it is now retirement benefits. Do I have to file taxes in April for the retirements received for 1/2 of 2019? My husband is unemployed and my caretaker as we could not afford one. So there is no actual earned income between us but I want to make sure that we file if we are suppose to.
    Kathy McKenna

    • Chris T.

      If social security is your sole source of income and you don’t have any earned income as you say you don’t need to file an annual tax return.

      • Kenny O.

        Hello Chris. Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if they have other substantial income (such as wages, self-employment, interest, dividends and other taxable income) that must be reported on your tax return, in addition to their Social Security benefits. For further income tax questions, you will need to contact the Internal Revenue Service (IRS). Their toll-free number is 1-800-829-1040. We hope this helps.

  10. lesly f.

    I am 65 years a good ideas to be self employed.but i am no income or fanancial to good for anyone who elderly disable no chances !

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