Social Security When You Are Self-Employed

man and woman cooking Most people who pay into Social Security work for an employer. Their employer deducts Social Security taxes from their paycheck, matches that contribution, sends taxes to the Internal Revenue Service (IRS), and reports wages to Social Security. However, self-employed people must report their earnings and pay their Social Security taxes directly to the IRS. These taxes will help determine your eligibility for benefits later.

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 purposes 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.

Net earnings for Social Security are your gross earnings from your trade or business, minus your allowable business deductions and depreciation. Some income doesn’t count for Social Security and shouldn’t be included in figuring your net earnings.

You can read more about self-employment, paying your Social Security taxes and figuring and reporting your net earnings by reading If You Are Self-Employed.

Social Security has been a cornerstone of American security for over 80 years. As a self-employed person, your small business is another cornerstone in the foundation of our economy. Working together, we make this nation stronger.

We’re here for you, securing today and tomorrow. Remember, the most convenient way to contact us anytime, anywhere is to visit our website.

 

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50 thoughts on “Social Security When You Are Self-Employed

  1. If you work after starting to draw SS, do you Get credit for this and will your
    Monthly amount increase due to working?

    • Great question Lois. Each year we review the records for all working Social Security recipients to see if their additional earnings may increase their monthly benefits. If your earnings for the prior year are higher than one of the years we used to compute your retirement benefit, we will recalculate your benefit amount. Generally, we will send a letter explaining any increase in your benefit amount. For your security, we do not have access to private information in this venue. Please call our toll-free number at 1-800-772-1213, Monday through Friday, from 7:00 a.m. to 7:00 p.m. or contact your local office directly for further assistance. To learn more read our publication, How Work Affects Your Benefits. We hope this helps.

  2. I would like to start my own business so i can work out of home and delegate who and how much work will be done depending on how i feel. I just started receiving SSI and also have back pay coming. Can i request that back pay early to start the business? Also my car was also stolen, and I would like to buy a car. Is it possible to receive back pay earlier than every six months.? I am still entitled to the back pay arent I, if i start my own busines?

  3. I work for a company that does not take out for social security due to my profession as a licensed Minister working in the hospital as a Chaplain PRN not Full time or part time,. They are telling me that I need to claim no fica taxes to be withheld, but that later in the year the company will pay back what we paid into Social Security individually. I am not sure that I understand this.,,and if that is true – how can I place those earnings into my Social Security.

  4. This Question may have been asked already but I havent found it yet so here it goes: I am new to disability this year. I recieved back payment, but no taxes or deductions were taken out, so I wasnt sure how i needed to report this to the IRS. The lump sum, in my case, goes back 3.5 years and I will be taxed as if I earned all that income this year. This diesnt seems fair. I should be able to ammend my taxes to retroactively reflect the income rather than a lump sum distribution. Maybe my thinking is wrong. What does the tax law say? I went as far as asking the IRS in person as well as the Social Security Administration. Both were unsure of how to report the income other than as regular income. What is the official answer?

    • Hi Derrick, thank you for your question. If you are referring to the SSA-1099 and you currently live in the United States, you can request a replacement online using your my Social Security account. If you do not already have an account, you can create one. Go to Sign In or Create an Account. Once you are logged in to your account, select the “Replacement Documents” tab. If you are unable to create a my Social Security account or do not want to request it online, you may call us at 1-800-772-1213 (TTY 1-800-325-0778), Monday through Friday from 7 a.m. to 7 p.m. or you can contact your local Social Security office.

      If you’re referring to a benefit verification letter, you can also request one online instantly by using your personal my Social Security account. This letter is sometimes called a budget letter, a benefits letter, a proof of income letter or a proof of award letter. Once in your my Social Security account, scroll down to the Benefits and Payments section and choose “get benefit verification letter” where you can instantly view, print, or save your official letter.

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