If your net earnings from self-employment exceed $400, you must pay self-employment tax and the Social Security Administration is notified of your contributions and income. If the additional credits are enough to entitle you to a higher monthly benefit, the Social Security Administration would make the calculation for you. If you are younger than the full retirement age, and make more than the yearly earnings limit, your earnings may reduce your benefit amount. (Full retirement age is 66 for people born between 1943 and 1954. Beginning with 1955, two months are added for every birth year until the full retirement age reaches 67 for people born in 1960 or later.) See this page for more information about the yearly earnings limit and possible benefit reductions.
Articles in this section
- Can I report as "Other Income" the $6,000 I made from providing day care services?
- What is the standard mileage deduction for the use of a vehicle in a business?
- Can I take a business deduction for the small cash donations my business makes to various qualified charities in the neighborhood? I am a sole proprietor.
- Will my self-employment income affect the amount of income I receive as Social Security benefits?