Self-employed? Know about Social Security responsibilities
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 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 at www.socialsecurity.gov/pubs/EN-05-10022.pdf.
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 www.socialsecurity.gov.
Ray Vigil is the Social Security public affairs specialist in El Paso.
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